Tax Date Is Nearing - things you should know

The US Tax system is pretty complex. It involves the local government, municipal, township, district and county governments. Also involved are regional entities such as utilities and school systems as well as state and federal governments.

Every person earning and income in the US must pay taxes both on the Federal and State levels. Tax returns must be filed before the 15th of April every year. Most employers deduct from the pay checks of their employees and pay the Internal Revenue Service (IRS) directly. Those who are self-employed can pay directly to the government. Federal taxes include Social Security and FICA. In addition, each state has its own income tax system. The withholding amount depends on the individual’s conditions such as marital status and their number of dependants.

The income tax is progressive. There are 6 tax brackets for ordinary income and this is further divided into 4 categories: single, married filing jointly or qualified widow(er), married filing separately and head of household. The tax percentage increases with income. For example, if you are single you will be taxed 10% up to $7550 of earnings. From there up to $30,650 you will be taxed at 15%. From $30,651 to $74,200, you will be taxed at 25%. The tax percentage keeps on increasing in this manner up to 35%.

If a tax payer has made any errors in filing his/her tax return, then an amended return must be filed with the IRS. An amended return need not be filed in the case of a math error as the IRS will make the necessary changes.

Citizenship or residency also comes to play in tax rules in the United States. A US citizen not living in the country is still liable to be taxed based on his or her world-wide income. In the same way a non-citizen who has sources of income in the US is liable for taxation.

There are many types of tax forms you will encounter when filing a tax return. Finding out which ones are the simplest for you will make the process easier and enable the IRS to process your tax return speedily.

Good luck with your tax returns!

ABOUT THE AUTHOR:

Susan Hutson is Community Director for Work at Home Moms. Bizymoms lives by their motto, "You can have it all!" and everyone there knows that sometimes, all a woman needs to make her work at Home Business dreams come true are the right resources and a strong cheering section! No one believes this more than Susan does. She spends her days in sunny Florida juggling a home, family and helping women build their dream business with help from Bizy Moms.