As one of the leading firms for tax preparation in Overland Park, Pro 31 Tax and Accounting (based in Louisburg) fields various questions from our customers regarding their income taxes. Although we all know that filing our taxes is something we must do every year, many people do not exactly know why. This article will give you a little extra background on why we all file our taxes each year.
Federal Government Revenue
According to Overland Park tax preparation experts, income taxes in the United States are the federal government’s primary source of revenue. In fact, it is estimated that almost 50% of the nation’s federal revenue comes from personal income taxes.
If you ask a small business accountant in Overland Park, they will tell you that corporate income taxes also contribute to the federal government’s revenue. Business income taxes typically contribute about 10% of the government’s revenue for a typical year.
Why Does the Government Need Our Money?
Federal Taxes go to the government to benefit the American people. The funds are used for various purposes, including technology and education. Accounting firms in Overland Park know that there are three categories that most significantly benefit from income taxes. These are:
- Social Security
- Health Programs
- Homeland Security & Defense
One mandatory portion of the federal government’s budget is the Social Security system. These funds are used to benefit retirees and those with disability needs and make up just under 25% of the federal budget.
Medicare and Medicaid are the two primary programs where the government distributes its health funds. Almost 67% of the budgeted funds go to Medicare, while approximately 25% of funds dedicated to health programs go to Medicaid and CHIP (Children’s Health Insurance Program).
Homeland Security & Defense
Another sizeable federal expense, according to firms specializing in tax preparation in Overland Park, is for our nation’s defense and homeland security teams. Each year can vary depending on the needs of these teams, but it was estimated that 16% of the federal budget was used for defense in security in 2019.
If you have any questions regarding filing your income taxes, reach out to an expert Overland Park tax accountant at Louisburg-based Pro 31 Tax and Accounting. Each member of the Pro 31 staff has over ten years of accounting and experience with tax preparation in Overland Park.
Give our Louisburg office a call at (913) 837-3131, or contact us online to learn more about how Pro 31 can help you or your small business with all your tax preparation needs.