2.  Taxes are expenses that you pay everyday that are used by the local, state and federal government to provide important services such as: police and fire protection, public schools, road maintenance, parks, libraries, military, Medicare and Medicaid, etc.

3.  Sales Tax – tax on products you purchase.  Excise Tax – may be charged on such items as automobiles, gasoline, air travel  Property Tax: tax on value of land and buildings (home). This is a major source of income to your local government. As the value of the property increases, so does the tax.

4.  Gift tax – applies to money or property valued at more than $11,000 given by one person to another. (amount subject to change by federal government at any time).

5.  Taxes on wages, salaries, and self- employed earnings. It is the main source of income for the federal government.  Wages – money received from hourly work.  Salary – money received for weekly or monthly work, regardless of the number of hours worked.

6.  Estate tax – federal tax collected on the value of a persons property at the time of their death.  Inheritance tax- this is a tax charged to heirs of a will and must be paid before the heirs can collect the inheritance.

8.  Unearned income is taxable and must be included on your taxes as income.  The tax rates for unearned income may be lower than income tax rates on earned income.  (ex. Dividend payments may be subject to a 15% tax while earned income tax may be at a much higher rate)

9.  Every year millions of taxpayers in the U.S. prepare and file their tax return with the Internal Revenue Service (IRS).  The form may be a 1040 or 1040EZ. The1040EZ is the simplest tax form to complete.  You are required to file an income tax return by April 15 th of each year (unless the 15 th falls on a Saturday or Sunday, in which case you would be required to file on the following Monday.  Financial penalties for late filing may be incurred, even if you are just one day late.  Your employer is required by law to send you a W-2 form, or the Wage and Tax Statement. This must be sent to you by January 31 st of each year.