• Quick note - the problem with Youtube videos not embedding on the forum appears to have been fixed, thanks to ZiprHead. If you do still see problems let me know.

Some Tax questions from an amateur.

Dustin Kesselberg

Illuminator
D
Joined
Nov 30, 2004
Messages
4,669
Im 18 and I have never paid taxes before and I have not worked "officially" yet. So I have a few questions about the basics of paying taxes to you all.

1.What websites have good basic information on Taxes? Please post some.

2.Is it true that some states do not have Income tax? If so Why?

3.Why do people get Tax returns at the end of the year? Why does the govt even take up money from their pay checks if they return it at the end of each year?

5.What websites explain the basics of which people have exceptions to specific taxes or get tax breaks.

6.What is the difference from Income tax and the tax I pay whenever I buy something,the sales tax? Where do both go? How are they used differently?

7.What other Taxes are there that people pay everyday beside sales tax and incom tax?


Please answer each question seperatly and clearly.

Thanks.
 
Dustin said:
2.Is it true that some states do not have Income tax? If so Why?
Click to expand...
States make money from other ways besides income tax. Nevada taxes gambling. Alaska taxes oil. By not having income tax they can entice people to move to the state.

3.Why do people get Tax returns at the end of the year? Why does the govt even take up money from their pay checks if they return it at the end of each year?
Click to expand...
It's easier to give a refund than to collect an outstanding debt. Knowing exactly how much the bill will be is often difficult (not impossible). An individual can increase the number of people he or she claims on thier W2's to reduce the amount witheld. Be careful though. If you reduce your witholding to zero and it is likely you would have known that you would have a debt you can be fined.

Please answer each question seperatly and clearly.
Click to expand...
Give me free advice and do it to my specifications damn it! :D

General Tax Questions (H&R Block)
Tax Tips & Resource Center (Intuit/Symantec)
Frequently Asked Tax Questions And Answers (IRS)


Thanks.
Click to expand...
 
You're 18. You probably wont be paying much in income taxes unless you have soem amazingly high paying job.

By they way. DOnt buy into any of the "you dont have to pay taxes" websites!
 
Dustin said:
3.Why do people get Tax returns at the end of the year? Why does the govt even take up money from their pay checks if they return it at the end of each year?
Click to expand...

Like RandFan said, the government likes to overtax you slightly and then give you a small refund rather than to undertax and then demand money. Most people are happier with that arrangement, too.

However, at the end of the day you are in control of how much money the government withholds from your paycheck. You can change this by submitting a W-4 form, which you'll have to get from your employer.

5.What websites explain the basics of which people have exceptions to specific taxes or get tax breaks.
Click to expand...

You probably won't need to worry about this for a while. Most people your age don't have complicated enough finances to make itemized deductions worthwhile. One exception would be if you're a student, in which case you should look at the Lifetime Learning Credit and Hope Credit.

Probably the best thing to do, though, would be to get a cheap tax preparation program like TurboTax. They're usually pretty good, and it'll ask you questions to find out what it needs to know about you. They cost a little money to start with, but everytime I've used it it's saved me more money than it cost.

6.What is the difference from Income tax and the tax I pay whenever I buy something,the sales tax? Where do both go? How are they used differently?
Click to expand...

Most of your income tax goes to the federal government, while sales tax goes to your state and local (county/city) governments. As for how they're used, I have no idea. :)

7.What other Taxes are there that people pay everyday beside sales tax and incom tax?
Click to expand...

Those are the two biggest ones for most people. You also pay taxes on certain services, like phone and cable TV (and power, and pretty much everything else :P ). People who own a house pay property taxes, which is a biggie for a lot of people.

Jeremy
 
Last edited:
He might smoke, drink, gamble or use gas, and they tax the [rule 8] out of those activities
 
Thank you.


Also..


1.I have heard some people claiming you do not need to pay taxes at all. Why are they claiming this? What are their arguments?

2.Is Florida one of the states that do not have income tax?
I heard Florida was one of them,But those I know who in florida pay Income taxs and get money back yearly from it. What's going on there?
 
Dustin said:
1.I have heard some people claiming you do not need to pay taxes at all. Why are they claiming this? What are their arguments?
Click to expand...

The argument, as far as I know, is that the laws that say you have to pay taxes don't define what "income" means very specifically, so some people think it doesn't apply to money they make from working, or something like that. It's mostly a bunch of anti-government crackpots who try it, and judges have been laughing that argument out of court for years. In fact, judges have gotten so sick of it that they actually started punishing lawyers who use that argument, because they should know better!

2.Is Florida one of the states that do not have income tax?
I heard Florida was one of them,But those I know who in florida pay Income taxs and get money back yearly from it. What's going on there?
Click to expand...

Florida doesn't have an income tax of its own, but you still have to pay the federal income tax no matter what state you live in. The federal tax is much bigger than the state one anyway, so it doesn't make that big of a difference.

Jeremy
 
Last edited:
Dustin said:
1.I have heard some people claiming you do not need to pay taxes at all. Why are they claiming this? What are their arguments?
Click to expand...
Here is a great document from the IRS listing dozens and dozens of bogus claims about not having to pay tax - as well as the specific legislative and legal cases that say otherwise. If anyone has ever had to deal with a "tax kook" that link is a great resource.
 
Dustin said:
2.Is Florida one of the states that do not have income tax?
I heard Florida was one of them,But those I know who in florida pay Income taxs and get money back yearly from it. What's going on there?
Click to expand...

Florida does not have a state income tax. It has Federal income tax though, like everywhere else.
 
7.What other Taxes are there that people pay everyday beside sales tax and incom tax?
Click to expand...

Another big withholding from the pay check for most people your age is social security. Somewhere around 7.5% of your income. You don't get any refunds on this.
 
TriangleMan said:
Here is a great document from the IRS listing dozens and dozens of bogus claims about not having to pay tax - as well as the specific legislative and legal cases that say otherwise. If anyone has ever had to deal with a "tax kook" that link is a great resource.
Click to expand...


That's in PDF format which does not work for me.I don't have "PDF".


Is there any other way I can access it?
 
Dustin--as many people said here, you might not have to file a income tax return (state or federal) if your income is below a certain minimum level. Presuming you do, however...

1.I have heard some people claiming you do not need to pay taxes at all. Why are they claiming this? What are their arguments?

There are about 2,298 different arguments why you don't really have to pay income tax, and the one thing common to all of them is that they are all wrong. All those arguments have been tried in court and failed 100% of the time, the judges ruling them as "frivolous"--which is legalese, not for "you're wrong", but "you're out of your mind".

Incidentally, in the last two years alone, seven or eight of the leading "untaxing gurus" who lead the "tax protestor" movement (as they call themselves) were sentenced to jail. Not one person had ever managed to avoid a cent in taxes using these arguments.

Here are two excellent web site that summarize both the anti-tax "arguments" (such as they are) and why they are wrong:

http://evans-legal.com/dan/tpfaq.html

http://www.quatloos.com/taxscams/taxprot.htm

2.Is Florida one of the states that do not have income tax?
I heard Florida was one of them,But those I know who in florida pay Income taxs and get money back yearly from it. What's going on there?

Perhaps you are confusing STATE and FEDERAL income tax? Even if Florida doesn't have a state income tax (I am not sure if it does or doesn't), anybody who lives there still has to pay federal income tax.
 
Texas and Alaska do not have state income taxes. Most states do. I don't know about Florida. I don't know anything about filing state tax returns.

However:
Check your pay stub. If a single dollar of Federal Income Tax was withheld, AND you earn in a year less than whatever the minimum income limit is, you ARE due a refund. File a return and get all your money back.

If you made more than the minimum income limit AND Federal Income Tax was withheld, you MAY be due a refund. File a return and maybe get some of your money back.
 
You must log in or register to reply here.

Back
Top Bottom