If this is your first tax season as husband and wife, here are four things that will be different this time...
3 Minute ReadTopic: taxes
A huge chunk of your income is dedicated to taxes. In fact, the average family paid more than $12,000 in federal income taxes last year!
As a taxpayer, you hand over the dough to keep some important federal programs afloat. If you’ve ever been curious about where your tax dollars go, check out these seven ways the government spends your tax money:
Health programs: Your taxes go to fund health programs like Medicaid, Medicare, Children’s Health Insurance Program and general health initiatives. Together these programs account for around 28% of last year’s federal budget.
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Military: Your taxes also help pay for national defense and security-related programs. Funds in this category support the Department of Defense and the cost of international military programs.
Social Security: More than 60 million Americans received Social Security benefits in 2016. Beneficiaries include retired workers, surviving children and spouses of deceased workers, and disabled workers.
Interest on the national debt: It’s no secret that the government isn’t gazelle intense about paying off its debt. The national debt is $17 trillion, and the federal government relies on your taxes to make the interest payments on the borrowed funds. Last year, the interest payments claimed around 6% of the federal budget.
Veteran benefits: There are around 22 million veterans in the U.S., and your income taxes help cover their pensions, medical care, education programs and disability payments. The government also funds the operation of VA medical facilities and clinics.
Food and agricultural benefits: This category includes assistance programs like the Supplemental Nutrition Assistance Program, the National School Lunch Program and Federal Crop Insurance.
Education programs: Pell Grants, work study programs, student aid and elementary and secondary education initiatives are funded through your income taxes.
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Here are a few other ways the government uses your tax money:
- Unemployment and labor programs like Temporary Assistance for Needy Families (TANF) as well as retirement and disability benefits for federal employees
- Government expenses like U.S. Customs and Border Protection and the operation of the Federal Prison System
- Housing assistance and community development programs
Don’t Overpay Your Taxes
While your tax money is essential to keep our government running, that’s no reason to pay more taxes than you have to. But, each year taxpayers voluntarily hand over more than $1 billion to the government by failing to file a return or claim credits they’re eligible for. That’s money that rightfully belongs in the taxpayers’ pockets, but they leave it all for Uncle Sam without batting an eye.
After three years, this money becomes the property of the U.S. Treasury, and the government gets to decide how to spend it.
Get Help From a Pro
A tax professional can help you make sure you’re not paying more taxes than you should this year. A professional can also review past years’ tax returns for any money you overpaid the IRS.Tax day will be here before you know it, so don’t put this off. Make an appointment with an experienced tax professional in your area today.