How to pay taxes in the US
What is a tax?
A tax is an amount of money we pay to governments. Governments include federal government, state governments, and the smaller, local governments that run counties and cities. If you earn money, spend money, or own property in America, you will pay taxes of one kind or another. It is important to understand how to pay taxes in the right way.
When citizens and green card holders pay taxes, they are paying their share of programs that benefit them and their communities. For example, taxes pay for schools, hospitals, and roads.
What is income tax?
Income tax is a tax on your income (what you earn or receive every year). People pay income tax to the federal government and to most state governments. (Some states, such as New Hampshire and Florida, do not charge income tax.) Federal income tax is collected by the Internal Revenue Service (IRS) and goes to the US Treasury. State income tax goes to state revenue departments.
The rate, or amount, of income tax you pay depends on how much you earn and what your expenses are. People who earn or receive more money pay more in taxes than people who get less money.
Other things affect how much you pay. If you have children, you get a large tax credit to help you with the costs of raising a family. A tax credit means you pay tax on less of your income.
Getting married can affect how much tax you pay, too. Single people get a lower tax credit than a married couple, so they may pay more tax. But married couples who both work may pay more tax together than when they were single.
How do I file a tax return?
Every year, workers and businesses have to calculate their income for the year before. Then they figure out how much tax they owe and send their figures to the government. This process is called filing a tax return. Many people have already paid their taxes by the time they file their tax return. This is because an amount for taxes is taken from their regular paychecks before they get paid. Sometimes, your tax return may show you’ve already paid too much tax, and the government owes you a refund!
Do I need to file a tax return?
Whether you owe taxes or the government owes you, it is your responsibility to know when and how to pay taxes and to send your tax return to the government every year before April 15. You will send in your tax return on a form printed by the government. The forms are very long and ask for lots of details about your income and expenses.
How do I get help paying taxes?
If you are having a hard time understanding how to pay taxes, do not worry. You can get help. Many community and resettlement organizations offer assistance. If you are a recently resettled refugee, ask for help at your resettlement office.
Even if you are not a refugee, the government has a program to help people who need it. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who earn $54,000 a year or less, to people with disabilities, and to people with limited English. Here is a page with information about VITA. You can quickly find the nearest help by using this VITA locator. Many places offer help in Spanish, Arabic, Chinese and other languages.
Filing your tax return online
If you prefer to file your own tax return, there are several programs you can use, including the most common one, Turbo Tax. But you do have to pay for Turbo Tax.
You can also go straight to the IRS Freefile website and start the process there.
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