Taxes

Income tax is a government-imposed levy on an individual's earnings, profits, or income, as well as on certain other sources of revenue. It is one of the primary methods through which governments generate revenue to fund public services and infrastructure. Income tax is typically collected at both the federal and state or provincial levels, depending on the country's tax system. Income tax is generally collected through employer withholding for salaried employees or through self-reporting for self-employed individuals and those earning non-salaried income. Taxpayers must file annual tax returns, reporting their total income and claiming any deductions or credits they are eligible for, which can help reduce the amount of tax owed. 

Property tax is a type of tax levied on the value of real estate properties, including land, buildings, and any improvements made on the land, such as houses, commercial structures, or other structures. It is an ad valorem tax, meaning it is calculated based on the assessed value of the property. Property taxes are imposed by local governments, such as cities, counties, or municipalities, and the revenue generated from these taxes is used to fund various public services and infrastructure projects within the jurisdiction. To determine the property tax amount, assessors from the local government evaluate the market value of the property, considering factors like the property's location, size, age, and any recent improvements. Property tax rates are then applied as a percentage of the assessed value, and the tax is typically billed annually or semi-annually to property owners.

Sales tax is a consumption-based tax imposed by the government on the sale of goods and, in some cases, services. It is typically levied at the point of purchase and added to the price of the item or service. The responsibility for collecting and remitting the sales tax usually falls on the seller, such as retailers or service providers. Unlike income tax, which is based on an individual's earnings, sales tax is paid by consumers when they buy goods or services. This means that everyone who makes a taxable purchase contributes to the government's revenue, including tourists.

Income tax is a government-imposed levy on an individual's earnings, profits, or income, as well as on certain other sources of revenue. It is one of the primary methods through which governments generate revenue to fund public services and infrastructure. Income tax is typically collected at both the federal and state or provincial levels, depending on the country's tax system. Income tax is generally collected through employer withholding for salaried employees or through self-reporting for self-employed individuals and those earning non-salaried income. Taxpayers must file annual tax returns, reporting their total income and claiming any deductions or credits they are eligible for, which can help reduce the amount of tax owed. 

FICA is an acronym for the "Federal Insurance Contributions Act." FICA tax is a mandatory payroll tax that is deducted from workers' paychecks to fund two major federal social programs: Social Security retirement benefits and Medicare (Hospital Insurance) benefits. Similar in concept to federal income tax, FICA tax is specifically earmarked to support these critical social welfare programs. One significant difference between FICA tax and federal income tax is that FICA tax has an annual income cap. This means that only earnings up to a certain threshold are subject to the tax. Beyond this cap, no additional FICA tax is withheld. The income cap is adjusted annually to account for inflation and changes in the cost of living. It's important to note that employers are required to match their employees' FICA tax contributions by paying an equal amount on behalf of each employee. This ensures that the Social Security and Medicare funds are adequately funded to provide benefits for retirees and individuals who qualify for Medicare services. 

Estate tax, more commonly known as the Inheritance tax, is a tax levied on the transfer of assets and properties from a deceased person to their heirs or beneficiaries. This tax is based on the value of the deceased person's estate at the time of their death. Inheritance tax is distinct from other forms of taxation, such as income tax, as it applies specifically to the transfer of wealth and assets upon someone's passing. The inheritance tax can have implications for beneficiaries, as they may receive a reduced amount of the estate after the tax is deducted. Estate planning and the use of trusts or other legal mechanisms can help mitigate the impact of inheritance tax on the assets passed on to heirs.

31.16% overall tax rate for a $100k income

22.42% overall tax rate for a $100k income