Paying Taxes in The USA

Paying Taxes in The USA

Taxes are paid by U.S. residents and citizens to local, state, or federal governments. Taxes are paying for all sorts of services rendered by these governments. We know several sorts of taxes, such as sales tax, property tax, or income tax.

Sales taxes. Sales taxes are taxes imposed by local and state governments. Sale taxes are added to the products you buy and are based on what an item costs.

Sales taxes are helping to pay for all sorts of local or state government services like police, firemen, and roads.

Property taxes. Property taxes are local and state taxes on your land and house. Generally, property taxes are helping to support local services such as public schools.

Income tax. Income tax must be paid to the federal government, and most states and some local governments also tax your income. Your ‘taxable income’ is the amount of money acquired through wages, tips, self-employment, and property sale.

The majority of people are paying their income taxes because from their paychecks, money is withheld for that purpose. How much income tax you need to pay is depending on how much you are earning. For people who make less money, the income tax rate is lower. In principle, everybody who is residing in the U.S. and is earning income must file tax returns and pay any owed taxes.

The IRS (Internal Revenue Service) is the U.S. federal organization to collect income tax. Each year, taxpayers are required to file a federal income tax return (Form 1040) with the IRS. Tax returns are telling the U.S. government the amount of money you have earned, and how much was already taken from your paycheck in taxes. In case too much was taken out, you’ll receive a refund, and in case not enough was taken out, you must pay additionally to the IRS.

Medicare and Social Security taxes. These are federal taxes that are taken out of your paycheck. Social Security taxes are providing benefits to, for example, certain disabled workers, retirement benefits for certain workers, and specific deceased workers’ family members.   Medicare taxes are paying pay for a lot of medical services for people who are older than 65. To receive Medicare and Social Security retirement benefits, you are generally required to have worked for at least 10 years during your life. In some cases, you may require less than ten years of work to receive disability benefits or survivors’ benefits for your family.


The federal government form that is listing your taxable income and your paid taxes for the last tax year is the W-2 Form. A tax year runs from January 1st to December 31st of every year. Your employer is required by law to send you a W-2 form no later than January 31st every year.

You will get your W-2 form for each individual job that you have. You need to send the IRS a W-2 copy of each job attached to your federal income tax return, and if you are living or working in an income tax collecting state, you need to have your state income tax return accompanied by a copy of your W-2 form.


If you are a permanent U.S. resident, every year you need to file a federal income tax return. Your tax return is covering your earnings for the period of January through December of the past year. You are required to file your tax return before April 15th. Free help with your tax return is available at one of the many IRS Taxpayer Assistance Centers, and you don’t need to make an appointment in advance.

There is more help. All across America, in numerous communities, you can find ‘Taxpayer Assistance Centers’, and if you want to learn about the location of a ‘Taxpayer Assistance Center’ near you, go to: If you want assistance by phone, you can call the IRS at this number: 1-800-829-1040.


Taxes are paying for all sorts of services that the federal government is providing to U.S. citizens and residents. Here are a few examples of what the government is doing with your tax dollars:

  • Keep our country secure and safe.
  • Educate the next generations and adults.
  • Protect our money in the banks by insurance.
  • Prevent and cure diseases through study and research.
  • Build and maintain our country’s roads, highways, and bridges.
  • Provide medical services for the elderly and the poor.
  • Provide emergency help when floods, hurricanes, earthquakes, or other natural disasters strike.

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