The term “taxation” is usually used in a legal sense, as in “tax evasion.” However, in the United States, taxes are generally used to describe the method by which money is spent or collected from a person or institution. A tax is generally a voluntary financial obligation or any kind of levy levied upon a taxpayer by some governmental agency in order to finance specific public needs and projects. Evasion of or refusal to pay tax, and/or compliance with or assistance with tax, is also punishable by law.
Taxes in the United States have been very high over the years. The Internal Revenue Service, which is responsible for collecting such taxes, has been plagued with problems and corruption over the years. The Trump administration has promised to crack down on tax evasion and to increase funding for the IRS. The President’s plan includes raising the highest percentage that the Internal Revenue Service can levy against an individual or business entity.
Property taxes are imposed on real estate by local governments. The taxes are assessed according to the appraised value of the property and vary from town to town. Several types of property taxes exist in most states and include: vehicle registration taxes, real property taxes, school taxes, and property value taxes. These taxes are typically implemented using annual tariffs that increase as the value of the property increases in each town. This type of tax is regulated at the local level, and collections vary from year to year.
Income and sales taxes are both mandated by governments use taxes. Both types of taxes are collected from wages or salaries paid to employees, and certain purchases made by consumers in state and local communities. Sales taxes are collected from retail sales of goods within a state and may be based on a basket or index of sales. Income taxes are collected by government agencies for the support of the different levels of government. High income earners are subject to higher taxes than others, and those who own large amounts of wealth are also commonly targeted for income tax audits.
Although income and sales taxes are collected by the government, indirect taxes are often applied when making business transactions. These include property tax, license fee, and franchise tax. Property tax is applied when a person purchases or owns real estate within a state, while franchise tax is imposed when an entrepreneur wishes to open a business within a specific state. These taxes are levied on the basis of a proportion of the net sales or income of the business.
Most businesses are required to pay income tax. Many people also personally pay income tax, and this form of taxation is widely regarded as a right of citizenship. A tax accountant represents the government when a tax assessment has been made and represents the taxpayer in any appeal proceedings that might occur. Business owners should seek professional help to properly advise them on income tax assessments and should consider hiring a tax accountant to represent them when they are audited by the Internal Revenue Service.
- Get Started With Business Finances Using Accounting Software - 4th June 2021
- Investment Vs Speculation - 3rd June 2021
- The Importance of Budgeting in Your Financial Future - 20th May 2021