REGIONAL federal credit union Tip of the Month: What Do Taxes Do?

There are many different types of taxes that help fund various services and programs in our communities. Here are the most common ones, and some information on who collects them and what they are used for:

Income Taxes: Taxes you pay on the money you earn from a job, business or investments. Collected by the federal and most state governments.

Payroll Taxes: Taken out from your paycheck by the federal government to fund Social Security and Medicare, which provides retirement and healthcare benefits for older Americans.

Sales Tax: A percentage of the purchase price when you buy a good or services. Collected by state and local governments and used for infrastructure, education and transportation.

Property Taxes: Taxes on any home or property you own. Based on the value of the property. Collected by local governments to fund local services like schools and public safety.

Estate & Inheritance Taxes: Taxes collected on the assets from someone who passes away and leaves behind money or property. Collected by Federal or State governments.

Excise Tax: Taxes on specific goods like gasoline, tobacco, and alcohol, included in the price of the product.

Toll Taxes: When you use certain roads, bridges, or tunnels, you pay a Toll Tax. Collected by State & local governments to help pay for maintenance and construction of transportation infrastructure.