Death and taxes, two things none of us can escape. When you receive your first paycheck, assuming you haven't already, you're bound to notice that some money has gone missing. Don't worry, it's not the result of thievery, the government just called their share.
What’s the point of paying taxes?
You may be a little miffed at having such a seemingly large portion of your income diverted to taxes, and that’s certainly understandable. Though it doesn’t always help make the process less painful, it’s good to know that the money goes to good use. Taxes can definitely feel like a burden but are a necessary part of living in any country. Federal income taxes go toward a multitude of important national services and programs, everything from building roads, funding the military and traveling to space.
So do you have to pay?
The fact of the matter is that if you earn money you will have to pay taxes. Also,your age is no excuse; the IRS is clear that age is not a factor in determining whether someone owes income tax. If you receive money from a company, the company will simply take taxes from your check each pay period. If you earn over a certain amount in a given year, you will have to file an income tax form and pay taxes on that amount. In 2012, the rules said that a tax return must be filed if a person has earned income, meaning money from wages greater than $5,950.
What about Tennessee taxes?
Thankfully, Tennessee does not have a general state income tax. Once you begin earning money the lack of an additional income state tax will be much appreciated, a perk enjoyed by residents in only seven states across the country. Though there’s no general income tax in Tennessee, the law does slap a six percent fee on interest and dividend income from investments, so it’s possible that in some cases you could end up having to pay something.
Everyone’s heard what happens when people try and avoid giving the government their due. Tax obligations are not dependent on your level of wealth; the government can come after tax cheats whether they are rich or poor. Though there are a variety of possible penalties faced by those who fail to file or pay their taxes, the short answer is that tax evasion can result in any number of civil and even criminal punishments, including imprisonment.