Taxes are compulsory financial contributions levied on individuals or corporations by a governmental organization in order to collectively fund government spending, public expenditures, or as a way to regulate and reduce negative externalities. Tax compliance refers to policy actions and individual behaviour aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing the correct tax allowances and tax relief.

Law establishes from whom a tax is collected. In many countries, taxes are imposed on businesses (such as corporate taxes or portions of payroll taxes). However, who ultimately pays the tax (the tax “burden”) is determined by the marketplace as taxes become embedded into production costs. Economic theory suggests that the economic effect of tax does not necessarily fall at the point where it is legally levied. For instance, a tax on employment paid by employers will impact the employee, at least in the long run.

Taxes are collected by various government agencies, depending on the type of tax. In the United States, for example, the Internal Revenue Service (IRS) is responsible for collecting federal income taxes, while state and local governments collect their own income taxes, sales taxes, and property taxes.

There are many different types of taxes, but some of the most common include:

• Income tax: A tax on the income of individuals and businesses.
• Sales tax: A tax on the purchase of goods and services.
• Property tax: A tax on the ownership of real estate.
• Payroll tax: A tax on wages and salaries, which is used to fund Social Security and Medicare.
• Corporate tax: A tax on the profits of businesses.

Taxes are used to fund a wide range of government services, including education, infrastructure, healthcare, and national defense. Taxes also play an important role in redistributing wealth and reducing inequality.

Why do we pay taxes?

We pay taxes to fund the government and its services. Taxes are used to build roads, schools, and hospitals; to provide for national defense; and to support social programs such as Social Security and Medicare.

Taxes are also used to regulate the economy. For example, governments may impose taxes on certain goods and services to discourage consumption or to promote production of other goods and services.

How to file your taxes

The process for filing your taxes varies depending on the country where you live. In the United States, you can file your taxes online, by mail, or by phone. You can also use a tax preparation service to help you file your taxes.

To file your taxes, you will need to gather your tax documents, such as your W-2 forms from your employer and 1099 forms from any other sources of income. You will also need to gather any receipts or other documentation for deductions or credits that you are claiming.

Once you have gathered your tax documents, you can use a tax preparation software program or a tax professional to help you file your taxes.

Tips for filing your taxes

Here are some tips for filing your taxes:

• Gather your tax documents early. This will give you time to review your documents and get any questions answered before you file your taxes.
• Be accurate. Make sure that all of the information on your tax return is accurate and complete.
• File on time. The deadline for filing your taxes is typically April 15th, but there are extensions available if you need more time.
• Pay your taxes on time. If you owe taxes, you can pay them online, by mail, or by phone.