No one likes paying taxes, but it’s a necessary evil.
Here are 13 hard truths about income tax that you need to know.
1. You Have To Pay Taxes On Your Income.
There’s no getting around it – if you have income, you have to pay taxes on it. This includes wages from your job, money from investments, and even some forms of government benefits.
Income tax is an inescapable reality for most people. Whether you’re a salaried employee or a business owner, you’ll likely have to pay income tax. And even if you don’t earn a regular income, you may still be required to pay taxes on investments or other earnings.
2. Tax Rates Can Be High.
The amount of tax you have to pay depends on how much income you have. Tax rates can be as high as 35% for some types of income, so it’s important to understand the tax laws and plan accordingly.
3. You May Owe Taxes Even If You Don’t Make Very Much Money.
If you have income from sources other than your jobs, such as investments or rental property, you may owe taxes even if your overall income is low. This is because tax rates on investment income are often lower than tax rates on wages.
4. There are different types of taxes.
Income tax is just one type of tax. There are also payroll taxes, which are deducted from your paycheck, and property taxes, which are levied on your home or other property.
5. You Can Deduct Some Expenses From Your Taxes.
Certain expenses, such as charitable donations and medical bills, can be deducted from your taxable income. This can reduce the amount of taxes you owe.
6. You May Be Able To Get Tax Breaks.
There are some situations in which you may be eligible for a tax break, such as if you’re a low-income earner or if you have children.
7. There Are Penalties For Not Paying Taxes.
If you don’t pay your taxes, you may be subject to penalties, interest, and even jail time. So it’s important to make sure you file your taxes and pay what you owe on time.
8. You Can File Your Taxes Electronically.
You don’t have to mail in a paper tax return anymore. You can now file your taxes electronically, which is faster and easier.
9. You Can Get Help With Your Taxes.
If you’re having trouble understanding the tax laws or filling out your tax return, you can get help from a tax professional or the IRS.
10. Taxes Are Complicated.
The US tax system is complex, and it can be difficult to understand all the rules and regulations. But it’s important to learn as much as you can so that you can properly file your taxes and avoid any penalties.
11. It’s Not Going Away Anytime Soon.
Income tax is here to stay. While there have been occasional calls for its repeal, there’s little chance that will happen. So it’s important to learn how to deal with it and make the best of the situation.
12. You May Not Be Able To Deduct Everything.
There are a lot of things you can deduct from your taxes, but there are also many limitations. For example, you can’t deduct personal expenses like travel or entertainment. And there are limits on how much you can deduct for business expenses.
13. You Could Owe Money.
If you don’t pay enough in taxes during the year, you could end up owing money to the IRS. This can happen if you are under-withhold on your paycheck or if you have a lot of deductions and credits that lower your tax bill too much.
Read related articles here at tax rates 2019.