I have begun a course for tax preparation. It should help me do my own taxes and also find work as a tax preparer. The classes are self-paced, which can be good or bad depending on one's self-discipline.
I have begun a course for tax preparation. It should help me do my own taxes and also find work as a tax preparer. The classes are self-paced, which can be good or bad depending on one's self-discipline.
I am curious, is there a reason the taxes aren't deducted from ur paycheck directly? I see a lot of people worried/ complaining about doing their taxes but it's not the same over here. So I would like to know the concept around it
Good question. The simple answer is yes. Taxes are taken out of your paycheck. The government gets paid before you get paid. However, there are legal deductions and exemptions that are not calculated in payroll taxes. And there are circumstances, such as selling a home or other asset, that are taxable, which need to be settled. Also, self-employed people don't get payroll deductions.
Okay that makes sense but why are there taxes on homes being sold? shouldn't all the money go to the owners of the property, especially since they paid full price when they bought the place. how does it work?
Let's say you pay $100K to buy the house. Years later you sell it for $250K. You pay taxes on the capital gains, the additional $150K in increased value. It's the same concept for stocks and crypto.
Oh I get it now, so the tax is on the profit not the whole amount. I guess that makes sense in a way, in other ways, the government is just looking for any means to collect our money. Sigh!