The Importance of Paying Tax On Time and How to Estimate Annual Tax Returns - Debt Academy

The Importance of Paying Tax On Time and How to Estimate Annual Tax Returns

The Importance of Paying Tax On Time and How to Estimate Annual Tax Returns

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Tax plays a significant role in the development of a nation and its economy. The major portion of the government’s revenue comes from the taxes that it charges individuals and businesses operating within its economy. Generally, the government of the country utilizes the revenue, collected in the form of tax, for the betterment of the citizens itself. However, from an individual’s perspective, taxes are no less than a financial menace. In fact, for many Americans, taxpaying is a nightmare that haunts them every year when the inevitable new tax season arrives.

Tax Calculation Equals Severe Confusion

Tax and confusion, two words that often pop up in the same sentence and it’s no surprise given how complicated the taxation systems of most nations are. However, there are several countries in the world, whose taxation regimes are straightforward and it’s quite easy for individuals to estimate the taxes that they need to pay to the government, particularly with the taxation systems of most nations available. However, when it comes to the USA, the taxation systems and the laws governing it are highly perplexing that leaves US citizens scratching their heads while estimating their taxes.

The complexity of the tax calculation is the foremost reason that makes tax return calculations a haunting experience for Americans. However, modern technology has made it fairly easy for individuals to get an idea of the tax amounts that they need to pay. To be exact, individuals can easily calculate their pending tax amounts by means of an online tax calculator.A tax calculator can help individuals to estimate their total tax, which includes both state and federal level taxes.  For instance, if you are a citizen of Kansas, then you can use the Kansas Tax Calculator to find the exact amount of tax that you need to pay based on your yearly income and expenses.

Good Tax Return Preparation: The Elimination of the Fear

While paying taxes, most of us feel it quite unfair that the government is forcefully taking our hard-earned money. But we should remind ourselves that all the tax money paid to the federal government is eventually used for the betterment of citizens and the country itself. Whether the government invests money in the infrastructure projects like roads, public parks, hydro power plants, etc. or in upgrading the military, the main aim is to provide security and a better life to the citizens.

The other aspect of the tax fear correlates to the calculation of the taxes. It is completely true that the estimation of taxes is a task that is full of complexities. However, as tax avoidance comes with harsh consequences and a person might have to end up behind the bars, it is important to pay the correct tax amount at the right time.There are certain things that can help one to suppress their anxiety of paying taxes and are as follows:

  • Collecting information about all the sources that generate taxable income. By doing so, it will become easy to estimate the taxes that one have to pay at the end of the tax year
  • The government offers tax deductions and exemptions that eligible individuals can use to reduce their total taxable income
  • Keeping a regular record of all the personal transactions throughout the year can help to assess the total income and the expenditure. Indeed, there are many smartphone applications that allow individuals to record their transactions. By having a good estimate of the total income and expenditure, it becomes easier to calculate the taxes that need to be paid.
  • Tax form calculators allow individuals to have a good idea of total taxes that they are eligible to pay on their yearly income, they are great for tax estimation. In addition, it is also possible to use a tax calculator for each state. One should know that the state tax rates are different in each state of the USA and if a Kansas citizen wants to estimate his possible taxes using tax calculator, then he/she should only use a Kansas Tax Calculator.

While the process of estimating taxes is intricate, good preparation and use of tax estimation calculators can ease the pressure of tax returns and general income tax planning. Although sometimes hard to accept, it is important to remember that by paying taxes, we strengthen our nation and do see the benefits in the long term.

Chris Tiemann

Chris Tiemann started his career at the age of 21. He now writes and shares his knowledge about building wealth with through real estate, and also shares an interest in investing, personal finance, and economics.

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