It is a common truth that every working citizen would pay taxes, whether they like it or not. Your taxes would depend highly on how much you are earning. Factors for taxation differ in every country, as each country has different rules regarding taxation and tax benefits.
There are five common aspects of the tax system:
1. Taxation is mandatory not a voluntary. Thus, every person or organization is subject to tax, meaning they have to provide a statement in respect of their earning and corresponding tax from earnings. Some organization can be exempted from tax, especially religious organization, However, they are required to file a return. Some governments are very strict about tax exemptions, and in general they have a criteria for tax exemption. If the organization does not meet the criteria, can not be exempted.
2. Tax is based on income. Income is basically your earnings. However, they should also incorporate interests, profits, dividends and such. Gifts and bequests are not subject to income, as a result, they are not taxed, however, some bequest need to be taxed such as land transfer taxes.
3. Taxes are paid on a regular basis i.e., Monthly. In fact, taxes are charged on the basis of your earning all year round. However, in some countries, this would exclude the 13th month pay. In general, people pay taxes through the company they work for, or the company would automatically deduct the tax from the earnings. Generally, a tax refund could be received early in the year (January or February at most). If you paid more than the tax you are to pay (corresponding to the total amount of your earnings during the year). On the other hand, if you fail to pay the calculated amount of tax in accordance with your earning, then the government will ask you for a balance due. The due balanced should be paid promptly because failing to do so would result in interests as well as penalties.
4. Taxes relate to many factors. In some countries, the amount of tax a person pay relates to the amount of earnings he/she has per month, whereas, some countries take into consideration the marital status of a person. Some countries take into consideration the industry type where the person works. Generally, it depends on the taxation laws of the government where you reside.
5- Tax benefits could be redeemed. The idea behind taxation is that you are supposed to pay them in order to fund the expenses of the government, which is generally for the people as well. There are several types of tax benefits, again depending on the laws of the government. Usually they would include educational benefits and health care benefits.
Income taxation should be personally looked over by the person himself. Usually, he has the power to save on taxes by setting his financial affairs in such a way that would benefit him. Remember to never bypass the rules of taxation, as tax controversies are pretty hard to solve, and usually would cost you a lot, not only on lawsuits but on damage payments as well. It would be best to keep track and make sure your taxes are in the right order.
There are five common aspects of the tax system:
1. Taxation is mandatory not a voluntary. Thus, every person or organization is subject to tax, meaning they have to provide a statement in respect of their earning and corresponding tax from earnings. Some organization can be exempted from tax, especially religious organization, However, they are required to file a return. Some governments are very strict about tax exemptions, and in general they have a criteria for tax exemption. If the organization does not meet the criteria, can not be exempted.
2. Tax is based on income. Income is basically your earnings. However, they should also incorporate interests, profits, dividends and such. Gifts and bequests are not subject to income, as a result, they are not taxed, however, some bequest need to be taxed such as land transfer taxes.
3. Taxes are paid on a regular basis i.e., Monthly. In fact, taxes are charged on the basis of your earning all year round. However, in some countries, this would exclude the 13th month pay. In general, people pay taxes through the company they work for, or the company would automatically deduct the tax from the earnings. Generally, a tax refund could be received early in the year (January or February at most). If you paid more than the tax you are to pay (corresponding to the total amount of your earnings during the year). On the other hand, if you fail to pay the calculated amount of tax in accordance with your earning, then the government will ask you for a balance due. The due balanced should be paid promptly because failing to do so would result in interests as well as penalties.
4. Taxes relate to many factors. In some countries, the amount of tax a person pay relates to the amount of earnings he/she has per month, whereas, some countries take into consideration the marital status of a person. Some countries take into consideration the industry type where the person works. Generally, it depends on the taxation laws of the government where you reside.
5- Tax benefits could be redeemed. The idea behind taxation is that you are supposed to pay them in order to fund the expenses of the government, which is generally for the people as well. There are several types of tax benefits, again depending on the laws of the government. Usually they would include educational benefits and health care benefits.
Income taxation should be personally looked over by the person himself. Usually, he has the power to save on taxes by setting his financial affairs in such a way that would benefit him. Remember to never bypass the rules of taxation, as tax controversies are pretty hard to solve, and usually would cost you a lot, not only on lawsuits but on damage payments as well. It would be best to keep track and make sure your taxes are in the right order.
About the Author:
Seomul Evans is a SEO Services consultant for the leading Dallas IRS Attorney. Visit the site to learn more about Forth Worth Tax Attorney services.
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