Saving money is a necessary activity that every individual must be doing. Nin case of emergency and unexpected situations, having a fund to support yourself or your family is very crucial. However, with the unstable stage of our economy, it is difficult to save money nowadays. With a lot of bills and expenses, our savings accounts are being compromised most of the time. One of such expenses that consume a big part of our income is the income tax. So if you want to save money, it is important to know how much the federal government is taking from what you earn.
Income tax is the term we usually hear in our daily basis. But not everyone knows what it is. Basically, we are taxed by both our state and the federal government. Hence, there are 2 simultaneous taxes being taken away from our income. These are the payroll tax and the income tax. Simply defined, income tax has a set of tax categories each with its own rate that ranges from 10 percent to 35 percent. On the other hand, payroll tax refers to the second tax system that is also applied in our income. This is for the payment for our social security benefits and our medical benefits. There is a fixed percentage of our income that is being taken away for our payroll tax. As a worker, you pay 6.2 percent for your social security system and 1.45 percent for your medical benefits.
Given that definition, we can tell that income tax is a big part of our working income. Being able to know these things will allow every employee to be knowledgeable towards the amount of money that we pay for taxes. For additional information about tax preparation, visit https://www.taxsharkinc.com/roseville/tax-preparation/