Kinds Of Taxes And Tips To Avoid Paying A Lot

There are many people wishing they could skip paying taxes but those who apply for Colorado tax ID knows the importance and benefits of paying. Paying different kinds of taxes is also a chance to decrease the burden ones have as well as prevent too much impact on the financial aspect of an individual.

  • Personal income tax. Filing a tax return is required for all Americans with a yearly income. The only exception is that if the earning is lower than the designated limit by the IRS. There are those that are able to receive tax refund due to overpaying but you might be careful with your withholdings in order to avoid owing money by year-end. Some people think that paying taxes to the IRS is a burden but these taxes are beneficial to a nation’s growth. Taxes can be a burden but there are tax credits you can avail such as credit for child and dependent, EITC, energy saving tax credits, child tax credit, saver’s credit and education credit.
  • Excise tax. This tax is specific only to some goods. Some people have no idea about this because it is already incorporated into the price of a good. For goods with sales tax, an additional excise tax means the government is taxing your tax. This is not easily avoided and many are not aware about this because it is already included the good’s price.
  • Consumption tax. This is more commonly referred to as sales tax. The wealthy are more affected with this tax because it follows the rule that the more you consume, the higher the tax you are paying. The sales tax is filed under regressive tax unlike income tax where it is treated as progressive tax. Almost all states have sales tax assessment save for a number of states including New Hampshire, Delaware, Oregon, Alaska and Montana.
  • Property tax. The oldest taxation in the United States and it does not require one to apply for Colorado tax ID unless acting as an executor for an estate. The property’s value will determine the tax calculation.

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