Understanding Taxes

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Federal taxes go to the national government.

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These taxes support federal programs and services.

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Local taxes go to cities or counties.

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These taxes support local services such as police and fire departments.

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Regressive Tax: Everyone pays the same amount, impacting lower incomes more.

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This tax system can disproportionately affect those with lower incomes.

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W-4 form is filled out to determine tax withholdings.

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Employees use this form to indicate their tax situation.

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Progressive tax rates increase as income increases.

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Higher earners pay a larger percentage of their income in taxes.

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A regressive tax takes a larger percentage from lower-income earners.

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This type of tax disproportionately affects those with lower incomes.

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The 1099 form is used to report income earned from freelance work.

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Freelancers use this form to report their earnings to the IRS.

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A progressive tax is designed to take a higher percentage of income from higher earners.

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This system aims to reduce income inequality.

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Service funded by federal taxes

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National defense

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Service funded by local taxes

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Public safety