Income tax is one of many taxes that Federal, state and local governments rely on. The amount of tax that is applied to a person or entity’s income depends on the tax bracket that they fit into. Generally, the higher the level of income, the higher the tax rate that is applied to that income. Not only are earnings through employment taxed, other earnings such as pensions, social security benefits and interest on some savings have an income tax applied to them. There are certain exemptions and ways to write-off taxes to reduce the amount owed for income tax. It is important to have your tax information filled out correctly to insure that you are getting the proper amount taken out. While it initially seems like a good thing if you are paying very little, if you are not paying the proper amount, you may be forced to make up for it later. Tax law can be very difficult to understand, therefore, contacting a professional can help you be more aware of what you are paying, or should be paying, and why.

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