I’ve decided to start this series of articles with information about the amount and type of taxes you pay. I won’t be able to cover all of the types of taxes that are paid by Americans because that would turn this article into a book. I’m just going to list a few of the most common taxes that most of us have to pay.How much do you pay in taxes every year? I can bet many of you don’t have any idea. You may think you can just look at your tax forms for last year and have the answer. I guarantee that would be just the beginning.Just take a look at the below list of various taxes and do the math yourself:Federal Income Taxes – Uncle Sam is currently taking between 15% and 39% of our Adjusted Gross Income to pay for what ever it is that they spend money on in Washington. The main point I want to make here is that many people feel that because they received a refund,Guest Posting they didn’t pay any taxes. For some people, this is true. However, the vast majority of people that receivea refund are just getting back the money they already paid in through withholding, minus the taxes they owed. HOW MUCH DID YOU PAY LAST YEAR?Income Tax Preparation – Yes, I consider the cost of having our taxes prepared by a professional as a tax. If the federal tax code was published in english, maybe more of us could prepare our own taxes.Social Security – 15.3% of your income goes directly to the federal government for social security and medicare and is conveniently deducted from your paycheck. The myth about your employer paying half is just that. If you weren’t required to pay social security, that is another 7.65% that your employer could pay you.Sales Taxes – Unless you live in a state that doesn’t have a state sales tax, this costs you around 6% to 7% of every penny you spend. Wouldn’t it be nice to buy something for $99.95, hand the clerk a $100 bill and get a nickle back.Property Taxes and Real Estate Taxes – These taxes can run intothe thousands of dollars a year. I know, there are some places you aren’t required to pay these taxes either, however, you can bet they get this money in other ways. Before you renters start smiling, remember that your landlord has to pay these taxes. Want to guess where he gets the money?The Other Guys Taxes – What do you mean “The Other Guys Taxes”? He can pay his own. For each item you buy, the manufacturers and distributors have expenses like the cost of production, packaging, shipping, etc. They also have to pay taxes. Who do you think actually winds up paying these expenses? If you buy it, you do. I have seen estimates that between 20% and 25% of the cost of most items is for taxes that they have to pay. To make a profit, all companies must pass all expenses they have along to the consumer.Gas Tax – With federal gasoline taxes over 18 cents per gallon and state gasoline taxes as high as 35 cents per gallon it isn’t hard to see that, with the price of gas currently under a dollar in most places, over half of the cost of your gas could be going for taxes.Self Employment Taxes – This is simply the way a self employed person pays their Social Security and Medicare. They are required to pay 15.3% of their gross income to cover these expenses. These are the people that really know how much taxes they pay. This is because they are required to write a check for them four times a year and, if they underpaid throughout the year, they may have to write another check on April 15th.When you look at your budget and wonder where all of your money is going, you may want to consider what you are paying in taxes. There are taxpayers in this country that are paying over 50% of their income in one tax or another.Here are links to a couple of other articles I’ve written on taxes:I Love That Big Tax Refundhttp://www.homemoneyhelp.com/taxrefund.htmlA 23% Federal Sales Tax!! But Wait!http://www.homemoneyhelp.com/fedsalestax.htmlI’m not trying to make a political statement here. I just believe that everybody should be aware of where their money goes. If you take a few minutes to think about it, I think you will realiz
Understanding the Taxes Imposed on Your Telecom Bills
This issue contains the second part of a two-part article on … and … charges and taxes placed on them. … the subject of taxes as it applies to your telecom bills is bro
This issue contains the second part of a two-part article on regulated and non-regulated charges and taxes placed on them. Unfortunately the subject of taxes as it applies to your telecom bills is broad enough to warrant a lengthy discussion.
In Part I,Guest Posting we covered the regulated and non-regulated charges that will appear on your bills. This issue will describe the different kinds of taxes that you will find, what they are paid for and who is exempt from them.
Taxes and tax-like charges can add as much as 25%, and more, to local telephone charges in some jurisdictions. This is an area to which no rules are universally applicable, so all generalities have exceptions. That being said, there are three “rules-of-thumb” which can be useful in understanding the taxes placed on your bills.
1. Generally, the four types of taxes include service fees and charges; franchise tax or surcharges; sales use or special taxes; and federal excise tax.
2. Taxes are not uniformly imposed on all services.
3. Some categories of users are exempt from some taxes.
Let’s take a closer look at specific taxes you’ll encounter on your bills.
Specific Service Fees and Charges
These charges may be imposed to support 911 services, operation of the Public Utility Commission (California), provision of special equipment for handicapped persons (California), Universal Service Funds, poison control centers (Texas), etc. The Presubscribed Interexchange Carrier Charge (PICC) would also fall into this category. Such charges may be calculated on a per-line or percentage basis. These fees apply universally and there are no exceptions.
Franchise Taxes or Surcharges
Usually local items, these charges can and may be imposed by the county or state governments. Most often these are calculated as a percent of the items that apply, (various local service charges, additional calls or message unit charges, and installation charges), but they may be calculated on some other basis. This tax is called a variety of names, including franchise fee, city tax, municipal charge, surcharge, additional charge (AC), gross receipts tax, etc. As usual, this varies from state to state.
Sales, Use or Special Taxes
These taxes may be imposed by a municipality, county, school district, transportation district, state or other taxing body. The “state and local taxes” section of your bill may be a combination of such items. Sales, use and special taxes generally apply to local service charges, additional calls or message unit charges, installation charges, and intrastate toll charges. (Most states also tax interstate toll charges.) And again, these taxes are most often a percent of the items to which they apply. That base may include franchise taxes, surcharges or other service fees. In other words, you are taxed on taxes!
Federal Excise Tax
This tax is imposed by Congress on non-exempt items. It generally applies to regulated services, except private lines, mileage, centrex-related enhancements, service and installation charges, and some other services. The base on which the tax is calculated may include franchise taxes, surcharges, and gross receipts taxes. Originally a Spanish-American War “luxury” tax, the rate has varied between 1% and 10% over the years, but has been held constant at 3% since 1983.
Remember, taxes are not uniformly imposed on all services. For example, white-page directory advertising is not taxed in most states, unless this statement item includes other items. (Arkansas and Oklahoma are exceptions, however.)