Taxes you didn't know you were paying

December 16, 2013 by in category Taxes tagged as , , , , , , , with 0 and 0
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It’s obvious when a consumer buys an item from a local retailer that the price that is actually paid will end up being more than the ticket price. Whether it’s a new car or a sweater at the mall, we pay taxes on almost all of our purchases. What many people may not realize is that they pay taxes on dozens of other items that aren’t as obvious. The following list explains a few of the many taxes you might not have known you were paying.

1. Self Employment Tax

This is basically Social Security and Medicare taxes for those who work for themselves. Employer and employee generally divide the tax which was 15.3 percent for 2013. Since a self employed person is considered to be the employer and the employee, this individual pays the full amount.

2. Alternative Minimum Tax (ATM)

This tax was put into effect in 1969 to make sure wealthy individuals pay at least something in spite of all the deductions and exemptions they may get. But it can get a bit confusing. This system has a completely different set of rules, rates, and deductions. On the 1040, individuals filing must determine if they’re responsible for paying this or not.

3. Gasoline Tax

Fuel taxes are considered a user’s fee and vary from state to state. By 1929 all the 48 states at the time had a gas tax. Congress has recently considered raising the federal tax to 15 percent. This would raise the amount to approximately 33 cents per gallon. Right now federal tax is approximately 18.4 cents for every dollar of gas pumped into your car. Add that to state taxes, which in some states like New York and California is nearly 50 cents, consumers are paying more for taxes than actual gas.

4. State Alcohol Tax

That glass of merlot you have with dinner comes with a hefty tax, especially if you live in Alaska or Florida. The numbers vary widely from state to state. The federal tax for a gallon of wine with less than 14 percent alcohol was $1.07 in 2012.

5. Phone Taxes

Whether it’s a cell phone or landline, phone companies are notorious for slipping in a host of fees and taxes in your phone bill. According to the Tax Foundation, cell phone users pay over 17 percent from local, state, and even federal surcharges and taxes that are added on to the bill. These charges are stuck at the end of the bill and are easily overlooked. In Nebraska, for every $60 bill the costumer owes for actual phone service, enough is added in taxes and extra charges to bring the bill to $75.

6. Miscellaneous Taxes

Nearly every item we purchase, vehicle we own, or any kind of license we obtain comes with a tax. Cars, trucks, trailers, and water-crafts are subject to taxes. Want to own a dog, go fishing, or get married someday? These seemingly everyday activities all involve paying a tax.

Since these dozens of taxes are separate and usually paid in small increments, the average person just doesn’t realize how much this process of nickel and dimming adds up. By some estimates even middle class Americans are handing over nearly half their earnings paying taxes.

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