The federal withholding tax table is complicated and varies based on the individual. No one likes to pay taxes. In fact, it is at this time in the nation that more people do not pay taxes than those who do pay taxes. The American tax code, set forth by the Internal Revenue Service, is a progressive tax-system in which the more money an individual makes, the more taxes that individual will pay, or
. the higher percentage of income will be paid. Now, that is a very simplified explanation of the tax-code, but a full description would take pages upon pages of explanation. Some other examples that must be taken into consideration for the amount of taxes that must be paid by an individual are the number of declared dependents, or by tax liens or advanced earned income credit payments.The IRS is a gigantic institution that employs hundreds of thousands of individuals. One would think that the tax-code could be simpler due to the number of people, but with such a diverse country and diverse amount of incomes and circumstances, the IRS has set up this system. Taxes can get frustrating at times, especially when the hard earned money from the past year is given back to the government. It is important to remember what the taxes are used for, and where the taxes are going. According to the Center on Budget and Policy Priorities, about 20% of taxes go towards Social Security, another 20% towards nation defense, and 21% towards Medicaid and Medicare. That is about the first 61% of the budget, with the remainder going towards safety net programs, paying off interest on debt, education, infrastructure, etc.As mentioned earlier, the complexity of the tax code can be overwhelming, but the IRS has provided some good tools in order to feel confident. It is also encouraged that having a tax accountant or using an online tax filing form is the best way to go. For a good chart on the Federal Withholdings, please see the link below:http://www.irs.gov/pub/irs-pdf/i1040tt.pdf More reference links: http://www.cbpp.org/cms/index.cfm?fa=view&id=1258 http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
