How Your Federal Taxes Are Used
As April 15th approaches each year, you know all too well how it feels to complete your annual tax return and pay your share of federal taxes to the IRS. But as you gather together your documentation (W-2s, 1099s), you deserve to understand just where that money goes. While you might cringe to think of how much you pay each year in federal income taxes (we all do!), it might be helpful to realize that these funds help keep important national programs going.
What does the government do with all of your hard earned money? Here is a summary of the most common things that your federal tax dollars are doing for our country:
- Military, Defense and Security: In 2013, US defense spending amounted to well over 670 million dollars, approximately 18% of the entire federal budget last year. Over 40 cents of every federal tax dollar supports our country’s military expenses. Your federal taxes fund both the Department of Defense as well as Homeland Security. Specifically, this tax money goes to pay for expenses related to current military activity, interest payment on past military debt and Veteran’s benefits. More of your federal tax dollars go to military expenses than all other areas.
- Social Security: Your federal taxes also are used to fund our social security system. Ultimately, when you get toward retirement age, this “investment” will benefit you too, as social security provides Americans with retirement and disability benefits.
- Major National Health Programs: Another significant portion of your federal taxes support health programs that are included in the federal budget including Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). Approximately 22 cents of every income tax dollar goes toward these health programs (largest portion of this goes to Medicare).
- Non-military debt: Nearly 10 cents of every federal tax dollar goes to the government to pay interest on non-military national debt.
- National Anti-Poverty Programs: A portion of your tax dollars go to support governmental programs that help those in our country who are struggling (food assistance, supplemental income, foster care and adoption programs).
- Education: A small portion of each federal tax dollar (about 4.5 cents of every dollar) supports education including elementary, secondary and higher education.
- Other: In addition to all of the programs discussed above, a smaller amount of your remaining tax dollars support law enforcement, housing assistance and community development, environmental programs, technology and space programs, agriculture and transportation spending. These programs combined account for approximately 12 cents of every one of your federal tax dollars.
Dealing with Tax Debt
Maybe know you know why the IRS is so adamant about receiving your tax payments. If you have been unable to pay your debt or think you will not be able to this coming April, you may want to speak to a professional tax firm and learn about the various ways you can resolve your debt.
Contact Success Tax Relief today and learn how you can resolve your debt to the IRS – once and for all.