The taxation system of America is considered quite complicated and is not easy to understand. Many people face a different kind of difficulties when they file tax returns. You should know the types of taxes you pay so that you can come up with proper financial planning to avoid haphazardly. Many people don’t understand the system and face problems. Some of them go under tax debts and find it hectic to deal with them. In such scenarios, they can read or seek help about it online from websites like https://www.taxdefenderusa.com. There are different types of taxes Americans pay. Everything that you consume cost you tax and you must give a certain amount to the government. You pay tax on income, the products you buy, bills you pay or the facilities you use. Everything has a price to keep the system going. There are a lot of types of taxes but some of them are discussed below.
Income tax is the most significant type of tax. Most of the revenue generated by the country is based on income tax. Citizens pay a certain amount of tax to the government on whatever they earn. Income tax is supposedly charged at different levels. It can be charged at local, federal, and state levels. The rules and regulations of the income tax vary from state to state. The terms and conditions are different for each state at the state level. Income tax is a must for the citizens. The amount varies depending on the earning power of a person.
Sales tax is a type of tax which citizens pay on the things they buy. It also varies from state to state. Different states in America don’t charge any kind of sales tax on the goods. But on the other hand, many states charge a heavy amount of tax on goods. Sales tax depends on the price of the goods. And almost all the goods have a certain percentage of taxation on them.
Excise tax is a kind of tax which is taken on the goods which are harmful to health. It is linked with the idea of removing unhealthy things from life by charging a higher price on them. So, it has a dual purpose; number one to generate revenue and number two to promote a healthy lifestyle. An excise tax applies to certain goods only.
Payroll tax is taken from the employees and employer in the name of social security. The employee and the employer must pay a certain percentage of their income. The employee and employer pay 6.2% and 12.4% respectively on the earning. This amount counts to paid for the social security provided by the government to them.
Property taxes are paid on the property by the property owners. The amount of these taxes is dependent on the market value of the property. These taxes are claimed to be taken to fund the local service.