Types of Taxes

Medicare

A federal program that provides health coverage if you are 65 or older or have a severe disability, no matter your income.

Regressive tax

A regressive tax, on the other hand, is one whose rate increases as the payer's income decreases. Examples of this is are many excise taxes since they a steady dollar amount (example 1$ tax rate for 1 pack of cigarette) which takes a larger portion of those who have a smaller income

Medicaid

A state and federal program that provides health coverage if you have a very low income.

Excise taxes

A tax based on the quantity of an item and not on its value. For example, the federal government imposes an excise tax of 18.4 cents on every gallon of gas purchased, regardless of the price charged by the seller. Examples of this tax are gasoline, cigarettes, alcohol, etc.

Gift Tax

A tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.

Proportional tax

A tax rate that is steady without changing ( for example a flat tax rate system with everyone paying 10% tax on income tax is proportional tax)

Progressive Tax

A tax whose rate increases as the payer's income increases. That is, individuals who earn high incomes have a greater proportion of their incomes taken to pay the tax. Examples are Federal Income Tax since it has tax brakets

Gross income

Gross income includes all of the income your business earns during the year

Estate Tax

Imposed on the transfer of property upon the death of the owner. They were created to prevent the perpetuation of tax-free wealth within the country's most affluent families. Estate taxes can be reduced greatly by have life insurance

Income Tax

Income Tax This is a tax levied on net personal or business income. Usually levied at a marginal tax rate which has different tax brackets depending on what level of income you produce. Businesses pay taxes on net income

IRS

Internal Revenue Service (IRS), a bureau of the U.S. Treasury Department, collects federal income taxes and enforces the Internal Revenue Code. It collects more than $2.4 trillion from approximately 234 million individual and business tax returns a year.

Inheritance tax

Many states also impose their own estate tax, sometimes known as an inheritance tax , also called death tax

Witholding Taxes

Money that is taken out of a person's paycheck each pay period that must be paid to the government by an employer, on a quarterly basis.

Income tax return

Money that must be paid by an individual by April 15 of each year, on income from the preceding year, along with the filing of all individual income tax return forms.

Estimated tax payments

Money that must be paid quarterly, generally by self-employed individuals whose taxes are not withheld by an employer.

Sales Tax

Most often used as a method for states and local governments to raise revenue. Purchases made at the retail level are assessed a percentage of the sales price of a particular item.

Net Income

Net income includes only the profit your business earns after you subtract business expenses and other allowable deductions (includes payroll taxes) from your gross income .

Five different Statuses for determining tax owed

Single, Married Filing Jointly (Spouses taxes are filed together), Married Filing Separately (Spouces taxes are filed separately), Head of Household , and Qualifying Widow(er) with Dependent Child

Property tax

Sometimes known as an ad valorem tax, is imposed on the value of real estate or other personal property.Real estate taxes are often subject to fluctuation based upon a jurisdiction's assessment of the worth of a property based on its condition, location and market value, and/or changes to the amounts apportioned to various recipients of the tax.

Payroll Tax

Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. This tax is given to the government according to FICA (The Federal Insurance Contributions Act) to use revenues from payroll taxes to fund such programs as Social Security, healthcare, unemployment compensation, worker's compensation and sometimes local governments even require a small tax to maintain and improve local transportation.

User fees

Taxes that are assessed on a wide variety of services, including airline tickets, rental cars, toll roads, utilities, hotel rooms, licenses, financial transactions and many others.

Capital gain Tax

Taxes that are those paid on any profits made from the sale of an asset and are usually applied to stock and bond transactions. This also includes profit made on real estate.

Ways individual income taxes are paid

Withholding Taxes, Estimated Tax payments, and Income Tax returns