Why do we pay 10% of our paycheck to the government for taxes, and why/under what circumstances do we get it back in tax returns, or have to pay more in tax returns?
In: Economics
In the US, you are essentially paying estimated taxes throughout the year. At the end of the year, you settle up the estimate with the actual amount you owed, which isn’t known until the year is over. Maybe you paid too much, maybe you paid too little.
Fun fact: Its generally better to owe taxes (which means you underpaid during the year) than to get taxes back.
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