How many times have we heard about government programs getting cut? How many times have we listened to politicians complain about how they don't have money to fix roads or improve buildings?
We all pay federal income taxes, right? Actually, according to the Tax Policy Center, about half of us are not paying federal income taxes: 46.4%
Kevin Robinson of Robinson Tax and Accounting Services told News 2, "You hear that and it makes you wonder - are they even filing taxes? But, I would say the majority of them are filing."
So, if most of us are following the law, how is this happening? The answer is right on your tax form. Over the years, politicians have added all kinds of exemptions and tax credits that chip away at how much we owe.
"The way the system's built, it's kind of loaded up front to reduce that. So, it's very possible that a lot of people...through just following the rules...either get money back or don't owe any tax," Robinson said.
You can deduct moving expenses, student loan interest, tuition and fees, children and childcare expenses. In fact, there's even an energy credit.
In addition, you need to factor in the tax rate.
"If we have a low enough tax rate out there to stimulate the economy, then actually that can bring more tax revenues in versus high tax rates that choke off incentives for businesses to hire," Robinson said.
Next, look at the state of the economy.
"A lot of people have lost jobs and don't have enough income to trip over the standard deduction or the personal exemption and pretty much they have zero tax liability," Robinson said.
So, when you add everything up, maybe it's not that hard to believe that nearly half of us do not end up owing federal income tax.
We know tax season sounds so far away right now. However, it's a good idea to contact a tax professional and talk about what credits and deductions you might be able to get. Many people get overwhelmed by taxes and sometimes end up paying money to the government when they actually should get money back.
WFMY News 2