US Tax Information

Taxes are separated into three separate revenues: the local government taxes, the state, and the federal government taxes. The amount of taxes for individuals are based on their income. The more someone makes, the more they pay in taxes and vise versa. One tax the people of the United States must pay is a social security tax, which we will now take a closer look at.

Social Security Tax Information

The social security administration was created back in 1935 with the intent to provide wag earners over the age of 65 with money each month so they would be able to continue to live comfortably after retiring. The social security money is now the main source of income for most of the elderly people in the United States. It is also used in cases of disability. If a spouse or parent dies, the widower and/or child receives the benefits of social security in the deceased place. The child will receive benefits until the age of 18 and the earliest age for the widower to receive benefits is 60. If an individual works for an employer, 6.2% of a worker’s income is taken from their paycheck each week in the form of social security tax. These deposits are met by the employer. If an individual is self-employed, they pay 15.3% into the social security program.

Independent Contractors Tax Information

Individuals are considered independent contractors when they run their own independent businesses and are paid based on the jobs they do and not on hourly or salary. Independent contractors are expected to pay a total of 15.3% of their net income in a total year with quarterly installments. Along with paying income taxes, the taxes paid by an independent contractor cover social security and Medicare contributions. To pay an independent contractor tax, an independent contractor fills out an IRS Form 1040-ES and sends it, along with the payment, in to the IRS four times a year.

Child Tax Credit Information

Child tax credit is credit for people who have qualifying children and whose income is under a certain limit, depending on filing status. It is given for child care or daycare expenses. In order for a child to qualify for this credit, they must:
• Be your son, daughter, eligible foster child, legally adopted step child, brother, sister, step brother or sister, or a descendent of any of them
• Be under the age of 17 at the end of the year
• Not provide more than half of his/her own support for the year
• Have lived with you for more than half of the taxable year
• Be a US citizen

The maximum return you may receive per child is $1,000. To claim child tax credit, you must fill out with Form 1040A or 1040 by April 15th.