Taxes might seem overwhelming, but understanding the basics can make the process much easier. In this guide, we’ll cover what taxes are, why they’re important, and how you can approach tax filing with confidence.
What Are Taxes?
Taxes are mandatory contributions individuals and businesses pay to the government. These funds are used to provide essential services like education, healthcare, infrastructure, and public safety.
Key Types of Taxes
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Income Tax:
A tax on earnings from work, investments, or other sources.
Example: Your salary, freelance income, or dividends from stocks.
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Sales Tax:
A tax added to the price of goods and services.
Example: When you buy groceries or a new phone.
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Property Tax:
A tax based on the value of owned property, like a house or land.
Example: Annual tax payments to your local government.
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Payroll Tax:
A tax employers deduct from employees’ paychecks to fund Social Security and Medicare.
