All Americans are subject to tax payments at some point in their lifetime; it’s an unavoidable fact. Today, we delve into the various taxes that Americans are typically required to pay regularly.
1) INCOME TAX
The term “tax” usually brings to mind federal income tax. With a large chunk of their earnings, reaching up to 35%, going to state and federal taxes, it’s no wonder Americans consider it foremost among taxes.
2) BUSINESS TAX
Business taxes, also known as corporate taxes, are levied on business profits. However, to lower taxable profit, necessary business expenses are often deductible. Some businesses even opt for schemes like the “eis” to raise capital more quickly.
3) PROPERTY TAX
As implied, property taxes are imposed on various types of property, whether real estate or personal assets like boats, cars, RVs, and business inventory, based on ownership.
4) PAYROLL TAX
Payroll taxes are those deducted from the salaries of employees, with employers often matching the taxed amount. These taxes can include federal withholdings, disability insurance, Medicare, and various state withholdings.
5) INHERITANCE TAX
The inheritance tax, colloquially called the “death tax,” arises when a taxpayer passes away. It’s levied on the transfer of properties or assets resulting from death.
6) CAPITAL GAINS TAX
In the U.S., capital gains, or earnings from the sale of an asset purchased at a lower price, are subject to tax. Most often, these gains derive from the sale of stocks, bonds, or property.
7) EXCISE TAX
Excise taxes are those based on the value of taxed products and applied per product quantity. Common examples include taxes levied on gasoline, cigarettes, and copyright materials, such as CD-R’s and DVD-R’s.
8) SALES TAX
Also known as consumption taxes, sales taxes are charged on the purchase of specific goods and services. The exact tax rate can vary widely depending on local and state taxes, and a consumer’s location.
9) GIFT TAX
Gift taxes are levied on property transfers, where a taxpayer gifts another something of value, either entirely for free or less than market value. Sales below market value or the provision of interest-free or low-interest loans may qualify as gifts.
10) RETIREMENT TAX
Retirement taxes are government levies aimed at provisioning for taxpayers’ retirement. In the U.S., we contribute to a Social Security system that pays retired workers from the general fund, with a tax rate that’s the same for all up to a certain income cap. Beyond that cap, no tax is applied.
11) TARIFFS
Tariffs apply to goods moving across political borders, either being imported or exported. Usually, they’re in place to support local industries by making foreign goods more expensive.
12) TOLLS
Tolls apply to drivers travelling through certain bridges, tunnels, or roads. Usually a fixed amount, these payments can fund public or private projects.
So, how many of these taxes did you recognize? Were any surprising? Find out more at smartasset.com.
