For anyone that has looked at their paycheck, the first thing everyone notices is that there is a significant
difference between the gross pay and the net take home pay.  The gross pay is reduced by a number of
deductions and you often have no choice in the deductions.  While many of these deductions are taxes, no
always and you should take the time to learn the difference.

Do the research and learn that taxes, like income tax, is not the same as Social Security Deduction.  These
are different because of what they relate to.  The social security deduction relates to your contribution into a
government overseen program that provides for your future.  The program is intended to provide you with
income once you retire and no longer get that paycheck.  

Taxes are the monies that the government collects to run various functions and departments within the
government network.  There are various taxes collected by the government for various programs, Medicare,
Social Security and Income taxes from both the Federal and State governments.  Also many state and local
(county and city) have established various forms of other taxes and fees.  Failure to pay taxes can result in
the government condemning your property and seizing it to pay the taxes or charging various fees and
penalties with interest.  There are other taxes of which you need to be aware.

If you want to get discouraged, sit down and see if you can figure out all of the taxes, fees and deductions
that are deducted and paid to various programs and government agencies.  Let's consider a few.  Now,
don't forget the simple ones that most people just accept without question.

Sales Tax:  this is a tax implemented by local and state governments on anything that is purchased.  It is
bad enough to spend $30,000 on a new car and then have that price go up with a variety of taxes and
fees.  Sales Tax can be paid on almost all purchases, sometimes food is excluded, and you see the impact
on the bottom of the receipt.  While it seems like just another annoyance, this money is collected on every
purchase which results in millions of transactions.  Imagine, 10% of every purchase goes to the
government.  You have to wonder why they need all of that money.

Real Estate Taxes: Normally a tax that is assigned and collected from local governments and is used to pay
for a number of local government services: education, police services and fire services are a few examples.  
Each local government determines how much is collected for each service.  Real Estate taxes are based on
a percentage of the market value of the house, which is estimated based on recent sales of similar
residences.   Real Estate taxes vary state to state and county to county so there is not simple explanation.  
Most counties have a local county treasurer and this person can provide more specific information.

Income Taxes: As discussed previously, income taxes are based on the level of income. The withholding of
the taxes from your paycheck is only the first step in the fun.  At the end of the year, all wage earners are
expected (required by law) to file a report with the Internal Revenue Service (IRS) of the federal government
and most state governments.  Luckily, the government has developed forms to help in this reporting.  The
current federal forms are known as '1040' forms (referring to the federal statute that permitted the tax).  
Most people will fill out the form and request a refund (if there was an over payment) or make up the tax due
if not enough was withheld.  In order to complete a simple tax return, there are on-line services over the
Internet available from the IRS (great if you are getting a refund). In addition, there are a number of
software packages that can help with this process and you should use the software for two reasons.  First,
the software packages create historical files.  Second, these forms can assist in the filing process and
submit the return over the Internet (for a small price) which speeds up the processing and gets refunds
faster, if one is due.

      -         1040 Short Form: this is the form that most people fill out.  For anyone with basic forms of
income and no deductions beyond the normal, this is the easiest and fastest form to complete.  This is
normally a one page form and can quickly be completed and filed.  The IRS version of the 1040 Short Form
is available at

      -        1040 Long Form: this is the form that people fill out if there are deductions or multiple forms of
income.  This  form can take hours to complete so don't be surprised and plan on setting aside enough time
to make sure it gets the attention it needs.

      -         State Tax Forms: these forms vary by state; however, most of today's tax software can support
both federal and state forms.

      -        Lastly, for completing taxes you need to have all your records together when you start.  You need
to establish what information should be gathered during the year and then, as items come in, put them all in
the same place.  Using a 9x12 envelope works well for keeping everything together.

Gasoline Taxes: this is another tax that impacts everyone and is partly a federal tax where the money is
used to build roads.

Auto License and Registration Tax: For everyone who owns a car, there is an annual process of Auto
License Renewal.  This is normally made up of two amounts, the Auto License and the Registration Tax
(based on the value of the car).

Luxury Taxes: These taxes are placed on luxury items like jewelry and furs.

The government is always looking for ways to collect more money to support the various government
organizations so don't be surprised when you see a new and different tax.  Recently, a number of areas that
rely on tourism as an income source started a new tax, where you are charged an extra tax for staying in
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