Ever Wonder…”Why Do We Get Taxed So Much” Find Out The Reason WHY!
As tax season approaches, you may be wondering exactly where all of that tax money actually goes. After all, you pay a portion of your monthly income to taxes, and then April 15th rolls around, and you worry about how much more you may owe!
Here is a general overview of just exactly where your tax money goes:
- Federal deductions: This is generally the largest chunk of money that comes out of your weekly (or monthly) paycheck, which is for federal income taxes. Federal deductions go to support things like highways, military expenses, housing, health programs, education, and even interest on the national debt. In 2015, the average US household paid approximately $13,000 in federal taxes to the government.
- State and local payroll deductions: Each state has a calculation for what they withhold from your paycheck — 41 states have income taxes, some taxes have flat-rate deductions and others withhold a percentage. Consult your state for specific withholding information.
- Other non-governmental deductions: There are other deductions that can be withheld from your paycheck that actually put more into your pocket. As an employee, you may have the opportunity to participate in programs offered through your employer like medical, dental and dependent care plans. Taking advantage of these and other offers from your employer will actually reduce your overall taxable income and in reduce the total amount of taxes that you have to pay.
Should You Change Your Withholding?
You may not realize that you can complete a W-4 Form at any time to change the amount of federal income taxes that is being withheld from your pay. You can obtain a W-4 Form directly from your employer anytime during the year. On this form, you specify the number of allowances that you would like to claim.The higher your number of allowances, the less money that will be withheld from your pay. A smaller number of allowances increases what is withheld from each paycheck. You are allowed to claim an allowance for yourself, your spouse and any dependent children.
So, decisions you make on your W-4 Form can impact whether or not you will receive a refund come tax time. The lower the number of allowances you take, the bigger the refund you can expect to receive. More allowances means more money in your pocket month to month and a smaller refund in April. Keep in mind that many view a tax refund as simply the IRS sending you back money that you have already earned that they kept for you for the year.
Get Tax Help This Season
Success Tax Relief is a full service tax firm that can help you, your family, and/or your business with general annual tax preparation to ensure that you maximize your deductions and keep more of your own money each year. Our team can review your current W-4 Form and other tax documents, discuss your financial situation and goals to help you determine the best strategy for your annual tax return. Partnering with our team will decrease the stress that you feel about taxes and your risk of potential problems with the Internal Revenue Service. Call Success Tax Relief today at 1-877-825-1179 for more information or contact us online.