Many, if not most, American citizens are required to file for both state and federal taxes each year before mid-April. Unless the day falls on a weekend or public holiday, both state and federal taxes are typically due by April 15th. But do you know the difference between state taxes and federal taxes are, or why you pay them? And do you know how title loans can help you pay these payments with an emergency cash title loan?
Here at LoanMart, we have years of experience in title loans, but also would like to inform you on what state and federal taxes are.
What are State Taxes?
State taxes, also known as a State Income Tax, is a portion of income that goes towards the funding of the individual state the taxpayer lives in. Different states around the U.S. have varying charges when it comes to the taxes residents of that state are required to pay.
Since State Income Tax is dependent on what the individual’s income is, American citizens who make a larger sum of money per-year typically have to pay more taxes than those American citizens who do not make as much money per-year. Because of this, State Income Taxes are broken up into what is known as “brackets.” People who make a larger amount of money have a higher percentage in their bracket, and those who make less have a lower percentage in their bracket.
If you don’t know what the state tax rate is for your area, you can check out this page which has a list of some recent state individual income tax rates and brackets.
What are Federal Taxes?
Federal taxes, also know as Federal Income Tax, is also a portion of income, but this portion contributes to the overall funding of the country. This tax payment does not vary from state to state, but it does depend on how much money each taxpaying American citizen makes per-year.
Like State Income Taxes, Federal Income Taxes are also broken up into brackets. Those who make usually more pay more according to their bracket, and those who make less have a lower percentage of income due to the federal government in their bracket.
Here is a breakdown of the Federal Income State tax brackets according to Investopedia.
- Those who make $9,325 per-year or less must pay 10% of their income to the federal government
- Those who make between $9,326-$37,950 per-year must pay 15%
- Those who make between $37,951-$91,900 per-year must pay 25%
- Those who make between $91,901-$191,650 per-year must pay 28%
- Those who make between $191,651-$416,700 per-year must pay 33%
- Those who make between $416,701-$418,400 per-year must pay 35%
- Those who make any more than $418,400 per-year must pay 39.60%
What do State and Federal Taxes Do?
State and Federal taxes go towards the funding of the individual state the taxpayer lives in, as well as the federal government as a whole—but what does that mean?
State services, such as your local police force, or park district centers, are paid for through the funding of the State Incomes Taxes. On the other hand, Federal services, such as the funding of the government institutions like the military, or government investments in technology.
Without your Federal and State Income Tax payments, you wouldn’t have state or local protection from a trained police force, park district centers to take education or fitness classes in, or even a nationwide military.
What are Other Common Types of Taxes?
State and Federal Income Taxes are probably not the only form of tax payments you make.
Some other common forms of taxes that American citizens usually pay are:
- Sales tax
- FICA (Federal Insurance Contributions Act)
Sales tax is a tax on almost everything purchased. However, some states do not have a sales tax—which means that there is no extra charge when residents of these states purchase groceries, movie tickets, or mostly anything else in the state.
FICA is a portion of a paycheck that is taken out to cover Social Security and Medicare taxes. FICA taxes can also be called, payroll taxes, because the money is taken out of an individual’s paycheck.
Ways to Pay your Taxes
Some of the time, when American citizens file their State and Federal Taxes each year, these individuals actually receive money back from the government. This can be because these individuals have chosen to have taxes taken out of each of their paychecks every time they get one. When people do this, they usually end up paying more than they owe the government in State and Federal Taxes, which will typically result in the government paying these individuals money during tax season.
However, many people end up having to pay the government money during tax season each year, which can become difficult if you don’t have the funds to do so. Here are some tips on how you can pay your State and Federal Taxes:
- Eat out less so you can spend the saved money on your taxes
- Dip into your savings
- Get a loan
- Save your money throughout the year, so you can pay your taxes right away
- Have your taxes taken out of your paycheck when you get paid, so you hopefully won’t have to pay anything at the end of the year
With title loans from LoanMart, you can use that emergency cash to pay for your taxes. But what are title loans? Title loans are one of the fastest and easiest ways to get emergency cash. If you want to get fast cash from title loans, check out our application and see how title loans from LoanMart may be able to help you1!
If you would like some more tips on how you can save money, click here to check out our blog!