The income tax act is prevalent in every nation (country) to allow the government to demand tax payments for their citizens. The amount of the tax bracket is for the purpose to help the country to move forward. The government charges taxes to individuals and businesses. But some people won’t pay no matter how strict the government on the implementation of its policies. We can only say, what are the consequences of this?
Withholding tax from the government is a criminal offense and charges may be filed against him or her when they refuse to pay taxes or failed to submit his or her income tax. Imprisonment and paying fines or fines alone can be the result of this criminal charge.
The United States federal income tax law says that if a person is unable to file their taxes for the income tax year, he or she will get penalized with some 25,000 US$ per year of non-payment and according to the federal income tax law, imprisonment for one year for not paying taxes is also part of the punishment.
Do not get caught. The filing is easy with TurboTax or another user-friendly income tax calculator.
Saying the amount of income tax calculated on my wages for the tax year is small and do not matter, is not a fair judgment, it is still significant for the country’s growth and development. While the money that you will be paying as taxes to your government may seem small compared to its overall standing, therefore, any person who doesn’t pay his taxes is, in essence, is taking something away from the government and from the people.
If the tax-man fees are too high to prepare your tax, there are many legitimate online tax tools to help you. With just the basic T4-60 as in Canada, TurboTax is simple, and if you access the online tool through your online banking, you will get 20% of filing. If you are filing United States federal income tax, online packages are also available.
When we pay your taxes, there are many significant benefits to the people, and the nation on the whole enjoy.
For instance, in the US, part of your taxes will be spent to provide defense and security to the citizens. Still, in the United States, defense and security satisfy not only the US but also, the whole global community. Take, for example, the US Government is sending thousands of its troops all over the world to keep world peace, and these troops require billions of dollars to carry out their tasks.
Another portion of the US taxes goes towards public schools, maintaining the roadways, buildings, and architectural structures owned by the United States Government. So, because of our income tax charge, many roads get fixed, and state buildings all around the country will also get renovated and furnished for the benefit of all of the people.
Social security includes retirement benefits, benefits for spouses of deceased workers, disability benefits, and child survivor benefits. Twenty percent of the budget goes to all these security benefits. Social security requires billions of dollars to continue serving the people of the country.
According to Wikipedia.org, income taxes in Canada constitute the majority of the annual revenues that Government, also the Provinces of Canada. For instance, for the fiscal year ending 31 March 2018, the federal government of Canada collected a little over three times more revenue from personal income taxes than it did from corporate income taxes.
Being a responsible citizen means that you understand why you pay your taxes, how the government is spending your money and where the taxes are going on behalf of the people. There we all owe it not only to our country, but we owe it to ourselves to pay our income taxes for each year.
Innovative: Stop Paying Too Much In Income Tax
Getting back to the subject: How much income tax that you pay to your government is not too far fetched if you are responsible for your spending. Do you know that some loans might give you a tax credit? Yes, there are mortgages which reduce the income tax yourself owe. Also, there are other types of investments that may provide you a tax deduction and reduces your gross taxable income? Almost everybody wants to borrow cash sometimes, and it makes sense to do your research before jumping into a big loan.
Did you know that when you take out a bank loan, you can also be shrinking the amount of income taxes you have to pay at the end of the tax year? Well, surprisingly, not all money borrowing programs are the same when it comes times to pay your taxes. Here’s a quick guide to which loans that might allow you to get a tax deduction, although obviously individual cases will vary.
School Loans: The interest that you pay on most student loans package only be decreased if you make under a specific amount of money, based on your individual filing status. Are you aware that many loans you take out for school could give you a tax advantage? You can, in lots cases, deduct the interest you paid on investment from your federal taxes. However, bear in mind that not all student loans are eligible for that benefit, but it’s an excellent way to reduce the taxes you pay, especially if you’re a cash-strapped student with a limited income.
Home Mortgages: For most taxpayers, their home is the biggest purchase they ever make and paying a home loan can actually be an excellent way to reduce the amount of cash you owe on your income taxes each year. Many house mortgages are designed so that you will deduct the amount of interest you pay on each loan that you have during each year.
Now, out of all the loans that have tax deductions associated with them, house mortgages are probably the most well-known. Since most home loans are designed to be paid over thirty years period, and that means purchasing a house can give you 30 years of possible tax deductions.
Home Equity Loans: You can always use your home equity loan for a variety of situations. You might also be able to have an additional tax credit by using the money for home repairs. If your home at its value now is more than when you purchase it, then there is the possibility to take out a home equity loan, nickname, HELOC, and deduct the interest you pay on that borrowed money.
Taking out a home equity loan used to improve your dwelling could eventually raise the value of your house and give you even more equity in the long run. However, there will be some restrictions about how much of your loan’s interest actually qualifies for a tax deduction. In some case, you can even earn tax credits for using the money to upgrade your home’s structure like replacing doors with more energy efficient models.
Most times applying for the right kind of loan can literally save you thousands of dollars on your income taxes, so it’s worth investing a little bit of time and energy to look into what sort of tax credits you qualify for. While of course, many of differences between these loans. Not everyone will be eligible for all the various tax credits that most of these loans may offer.
With that said, there are occasions when your income, the amount of money you want to borrow and the reason for your loan will determine the amount of finance you can deduct from your taxes in any given income tax year. Before you take out any of the investments we spoke about here, you might want to talk with your tax professional to ensure the tax benefits apply to your individual situation.
- How to File US Tax Returns in Canada?
- Using the United States-Canada Income Tax Treaty to Reduce Double Taxation.