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Paying Taxes
Taxes are money paid by
U.S. citizens and residents to federal, state, and local governments.Taxes pay
for services provided by the government. There are different types of taxes,
such as income tax, sales tax, and property tax.
Income tax.
Income tax is paid to federal, most state, and some local
governments. “Taxable income” is money that you get from wages, self-employment,
tips, and the sale of property. Most people pay income taxes by having money
withheld from their paycheck. The amount of income tax you must pay depends on
how much you earn. Income tax rates are lower for people who make less money.
Anyone who earns income, resides in the United States, and meets certain
requirements needs to file a tax return and pay any taxes they owe.
The Internal
Revenue Service (IRS) is the federal agency that collects
income tax. Taxpayers file a federal “income tax return” Form
1040 with the IRS each year. Your tax return tells the
government how much you earned and how much in taxes was taken
out of your paycheck. If you had too much taken out of your
paycheck, you will get a refund. If you did not have enough
taken out of your paycheck, you must send a payment to the
IRS.
Social Security and
Medicare taxes.
These federal taxes are
withheld from your paycheck. Social Security provides benefits for certain
retired workers and their families; certain disabled workers and their families;
and certain family members of deceased workers. Medicare taxes pay for medical
services for most people over age 65. In most cases, you must work a total of 10
years (or 40 quarters) over the course of your life to get Social Security
retirement benefits and Medicare benefits. You may need fewer than 10 years of
work to get disability benefits or for your family to get survivors’ benefits
based on your earnings.
Sales taxes.
Sales taxes are
state and local taxes. These taxes are added to the cost of buying certain
things. Sales taxes are based on the cost of the item. Sales taxes help pay for
services provided by state and local government, such as roads, police, and
firemen.
Property taxes.
These are state and local taxes on your house and land. In
most places, property taxes help support local public schools
and other services.
YOUR W-2 FORM: WAGE AND TAX
STATEMENT
A W-2 is a federal form that lists your earnings and
the taxes you paid for the last tax year. A tax year is from January 1 to
December 31 of each year. By law, your employer must send you a W-2 form by
January 31 each year. You will receive a W-2 form for each job you have. You
must send a copy of your W-2 form with your federal income tax return to the
IRS. If you live or work in a state that collects income tax, you must send a
copy of your W-2 with your state income tax return. |
Getting Help With Your Taxes
As a permanent resident, you
are required to file a federal income tax return every year. This return covers
your earnings for January to December of the past year. You must file your
return by April 15. You can get free help with your tax return at an IRS
Taxpayer Assistance Center. You don’t need to call ahead.
Taxpayer
Assistance Centers are located in communities across the United States. To find
the Taxpayer Assistance Center where you live, visit http://www.irs.gov/localcontacts/index.html.
To get help by phone, call the IRS at
1-800-829-1040.
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