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But the chance to claim your share of that money doesn’t last forever—you only have a three-year window to collect what Uncle Sam owes you. Since there’s no penalty for filing a late return if you don’t have to pay in, you’ll definitely want to do so immediately if you are owed money….Story continues…
By: Lifehacker Staff
Source: What to Do If You Haven’t Filed Your Taxes in Years | Lifehacker
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Critics:
The levying of taxes aims to raise revenue to fund governing, to alter prices in order to affect demand, or to regulate some form of cost or benefit. States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions.
Some of these include expenditures on economic infrastructure (roads, public transportation, sanitation, legal systems, public security, public education, public health systems), military, scientific research & development, culture and the arts, public works, distribution, data collection and dissemination, public insurance, and the operation of government itself. A government’s ability to raise taxes is called its fiscal capacity.
When expenditures exceed tax revenue, a government accumulates government debt. A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, transfer payments, subsidies and public transportation. Energy, water and waste management systems are also common public utilities.
According to the proponents of the chartalist theory of money creation, taxes are not needed for government revenue, as long as the government in question is able to issue fiat money. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.
The Organisation for Economic Co-operation and Development (OECD) publishes an analysis of the tax systems of member countries. As part of such analysis, OECD has developed a definition and system of classification of internal taxes,generally followed below. In addition, many countries impose taxes (tariffs) on the import of goods. Many jurisdictions tax the income of individuals and of business entities, including corporations.
Generally, the authorities impose a tax on net profits from a business, on net gains, and on other income. Computation of income subject to tax may be determined under accounting principles used in the jurisdiction, which tax-law principles in the jurisdiction may modify or replace. The incidence of taxation varies by system, and some systems may be viewed as progressive or regressive. Rates of tax may vary or be constant (flat) by income level.
Many systems allow individuals certain personal allowances and other non-business reductions to taxable income, although business deductions tend to be favored over personal deductions. Tax-collection agencies often collect personal income tax on a pay-as-you-earn basis, with corrections made after the end of the tax year.
These corrections take one of two forms: payments to the government, from taxpayers who have not paid enough during the tax year tax refunds from the government to those who have overpaid Income-tax systems often make deductions available that reduce the total tax liability by reducing total taxable income.
They may allow losses from one type of income to count against another – for example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate the loss, such that business losses can only be deducted against business income tax by carrying forward the loss to later tax years.
In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental payment from the government instead of paying taxes to the government. Most jurisdictions imposing an income tax treat capital gains as part of income subject to tax.
Capital gain is generally a gain on sale of capital assets—that is, those assets not held for sale in the ordinary course of business. Capital assets include personal assets in many jurisdictions. Some jurisdictions provide preferential rates of tax or only partial taxation for capital gains. Some jurisdictions impose different rates or levels of capital-gains taxation based on the length of time the asset was held.
Because tax rates are often much lower for capital gains than for ordinary income, there is widespread controversy and dispute about the proper definition of capital. Corporate tax refers to income tax, capital tax, net-worth tax, or other taxes imposed on corporations. Rates of tax and the taxable base for corporations may differ from those for individuals or for other taxable persons.
General government revenue, in % of GDP, from social contributions. For this data, 20% of the variance of GDP per capita – adjusted for purchasing power parity (PPP) – is explained by revenue from social security and the like.
Many countries provide publicly funded retirement or healthcare systems. In connection with these systems, the country typically requires employers or employees to make compulsory payments.
These payments are often computed by reference to wages or earnings from self-employment. Tax rates are generally fixed, but a different rate may be imposed on employers than on employees. Some systems provide an upper limit on earnings subject to the tax. A few systems provide that the tax is payable only on wages above a particular amount. Such upper or lower limits may apply for retirement but not for health-care components of the tax.
Some have argued that such taxes on wages are a form of “forced savings” and not really a tax, while others point to redistribution through such systems between generations (from newer cohorts to older cohorts) and across income levels (from higher income levels to lower income-levels) which suggests that such programs are really taxed and spending programs.
Unemployment and similar taxes are often imposed on employers based on the total payroll. These taxes may be imposed in both the country and sub-country levels. A wealth tax is levied on the total value of personal assets, including: bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts. Liabilities (primarily mortgages and other loans) are typically deducted, hence it is sometimes called a net wealth tax.
Recurrent property taxes may be imposed on immovable property (real property) and on some classes of movable property. In addition, recurrent taxes may be imposed on the net wealth of individuals or corporations. Many jurisdictions impose estate tax, gift tax or other inheritance taxes on property at death or at the time of gift transfer. Some jurisdictions impose taxes on financial or capital transactions.
A property tax (or millage tax) is an ad valorem tax levy on the value of a property that the owner of the property is required to pay to a government in which the property is situated. Multiple jurisdictions may tax the same property. There are three general varieties of property: land, improvements to land (immovable human-made things, e.g. buildings), and personal property (movable things). Real estate or realty is the combination of land and improvements to the land.
Property taxes are usually charged on a recurrent basis (e.g., yearly). A common type of property tax is an annual charge on the ownership of real estate, where the tax base is the estimated value of the property. For a period of over 150 years from 1695, the government of England levied a window tax, with the result that one can still see listed buildings with windows bricked up in order to save their owner’s money. A similar tax on hearths existed in France and elsewhere, with similar results.
The two most common types of event-driven property taxes are stamp duty, charged upon change of ownership, and inheritance tax, which many countries impose on the estates of the deceased. In contrast with a tax on real estate (land and buildings), a land-value tax (or LVT) is levied only on the unimproved value of the land (“land” in this instance may mean either the economic term, i.e., all-natural resources, or the natural resources associated with specific areas of the Earth’s surface: “lots” or “land parcels”).
Proponents of the land-value tax argue that it is economically justified, as it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do. When real estate is held by a higher government unit or some other entity not subject to taxation by the local government, the taxing authority may receive a payment in lieu of taxes to compensate it for some or all of the foregone tax revenues.
In many jurisdictions (including many American states), there is a general tax levied periodically on residents who own personal property (personalty) within the jurisdiction. Vehicle and boat registration fees are subsets of this kind of tax. The tax is often designed with blanket coverage and large exceptions for things like food and clothing. Household goods are often exempt when kept or used within the household.
Any otherwise non-exempt object can lose its exemption if regularly kept outside the household.Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax.[19] If an artwork had to be sent to another state for some touch-ups, it may have become subject to personal property tax in that state as well.
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