2021 Federal Tax vs. State Tax
Updated: Nov 3, 2021
Did you know that there are a few differences between state and federal taxes? You may think that they are the same, but as it turns out, there is more to it. Great, you just filed your taxes to the IRS! But now you have state taxes coming your way. In consideration of the inevitability, it's crucial that you understand both federal and state taxes as much as you can in order to reap the most benefits, so you never have to dread them every year.
Why State & Federal?
You might be curious why we pay taxes to the government. Not just federal taxes, but also state taxes. We pay taxes because the federal, state, and local governments require income to fund the infrastructure needed to sustain their inhabitants. Taxes finance a wide range of government services, including road, highway, and bridge maintenance, as well as public libraries, parks, and education, among other things.
Compared & Contrast
The Internal Revenue Service (IRS) imposes a federal income tax on the yearly profits of individuals, companies, trusts, and other legal organizations. Federal income taxes are levied on all types of income that constitute a taxpayer's taxable income, such as wages or capital gains. State income taxes are lower than federal income taxes. Mainly because the states also assess various types of property taxes, sales taxes, and even locality taxes in some states. State income taxes might vary greatly from one state to the next. Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming, in fact, have no income tax at all.
At the end of the day, you may carry heavy financial burdens from both state and federal taxes. Seeking relief programs for your state tax liabilities is not as common, and most of the heavy hitting balances are due to back taxes imposed by the IRS. Fortunately, there is a way out of your federal tax dues by reducing your total amount that you owe. There's a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program. Our clients are referred to our Fresh Start Program in order to avoid bankruptcy, acquire debt relief, and settle their debts in a quick manner. Let us give you a helping hand today!
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