How does taxes work?

How Do Taxes Work..............?

• In layman's terms, what does it mean to file taxes, and do all jobs give taxes back? If so, how does that work? My mother gets almost 2,000 dollars back in taxes, and I never really understood the process. How long would I have to work at a job to get my taxes back, and what does claiming someone on taxes mean?

• Answer:

  Everyone automatically has income taxes (along with Social Security and Medicare taxes) withheld from every paycheck. Their tax rate is based on their overall income; higher income = higher tax rate, lower income = lower tax rate. This is what is called a "progressive" tax system; it taxes the rich more heavily. People file tax returns to get money back through deductions. Deductions are available for people for various reasons. If you gave to a charity, that amount can be deducted from your taxes. If you have children and make below $30,000 per year you qualify for the Earned Income Tax Credit, and you get a large tax deduction. People file their taxes, write out their deductions, and send it off to the Internal Revenue Service on April 15th. Their refunds are based on how many deductions they were able to get. If your mother claimed you as a dependent, that is just her letting the government know that she is providing for you, and she gets another tax break for that as well. Our tax code is atrocious. It's over 60,000 pages long, and cheaters run rampant through it. The tax gap (the amount of money the government was supposed to take in, but didn't) is estimated at $355 billion per year. A new system is desperately needed.