list three more benefits that the taxes help in funding
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Answer:
What Is a Tax Benefit?
Tax benefit is a broadly encompassing term that refers to some type of savings for a taxpayer. Tax benefits reduce a taxpayer's monetary burdens. Tax regulations in general are determined by federal, state, and local governments. Tax benefits are often created as a type of incentive for promoting responsible behaviors or commercial activities.
KEY TAKEAWAYS
Tax benefits create some type of savings for a taxpayer.
Common types of tax benefits include deductions, credits, exclusions, and shelters.
Individual and commercial taxpayers should stay abreast of any tax benefits they may be eligible for, in order to capitalize on their rightful tax savings.
Understanding Tax Benefits
Tax benefits can come in a wide range of forms and may be known by a variety of names. Both individual and commercial taxpayers are wise to research and maintain awareness of any tax benefits for which they may be eligible for.
Tax deductions, credits, and exclusions are benefits that reduce the amount taxpayers owe annually to federal and state governments. Tax shelters are another form of tax benefit that can help to lower taxes through special investments.
Types of Tax Benefits
Tax Deductions
A tax deduction reduces a taxpayer’s taxable income. For businesses, tax deductions are often expenses that lower the total amount of income a company earns. Individual tax deductions can be claimed as either a standard deduction or as itemized deductions. The decision depends on which deduction type lowers the taxpayer’s liability the most. Above the line tax deductions also exist.
A standard tax deduction is a fixed dollar amount that reduces taxable income. The amount depends on the taxpayer’s filing status. For 2021, a single taxpayer can claim a $12,550 ($12,400 for 2020) standard deduction.1
Itemized deductions are expenses allowed by the Internal Revenue Service (IRS) to decrease a taxpayer’s taxable income. Itemized deductions allow an individual to list out qualified expenses on his tax return, the sum of which is used to lower his adjusted gross income (AGI).
Individuals will opt for itemized deductions if the sum of qualified expenses is more than the fixed amount provided under the standard deduction. For example, if a single taxpayer’s total itemized expenses are $12,900, they will likely choose to itemize rather than apply the standard deduction to his AGI. On the other hand, if the same filer’s qualified expenses total $8,000, they will most likely opt for the standard deduction.
Answer:
Health programs: Your taxes go to fund health programs like Medicaid, Medicare, Children’s Health Insurance Program and general health initiatives. Together these programs account for around 28% of last year’s federal budget.
Military: Your taxes also help pay for national defense and security-related programs. Funds in this category support the Department of Defense and the cost of international military programs.
Social Security: More than 60 million Americans received Social Security benefits in 2016. Beneficiaries include retired workers, surviving children and spouses of deceased workers, and disabled workers.
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