1. Property Taxes
Property taxes are taxes that are paid based on the value of real estate. These taxes are collected by local governments and sent to state and federal government. Property taxes are generally assessed at the time of purchase, and they are not adjusted for inflation. In some states, property taxes are tied to the Consumer Price Index (CPI). If the CPI rises, then property tax rates rise automatically.
2. Federal Income Tax
Federal income tax is a tax that is charged on individual incomes over $200,000 ($250,000 if married filing jointly) and joint incomes over $400,000 ($450,000 if married filing joint). Individuals who earn less than these amounts are exempt from paying any federal income tax.
3. State Income Tax
State income tax is a tax levied by each state on its residents. Each state sets its own rate, and many states have a flat-rate system where everyone pays the same percentage of their income regardless of how much money they make. Other states use graduated systems, meaning that people pay higher percentages of their income as their income increases.
4. Local Income Tax
Local income tax is a tax imposed by cities, counties, townships, school districts, special purpose districts, and transit authorities. Like state income taxes, local income taxes vary widely from place to place. Many places charge no local income tax at all. Others may impose a low rate, while others may levy a high rate.
5. Sales Tax
Sales tax is a tax on purchases. Most sales taxes are applied to retail goods and services, although some jurisdictions apply them to wholesale transactions. Sales taxes are often called consumption taxes because they are meant to discourage consumers from buying certain products.
6. Excise Tax
An excise tax is a type of tax that is placed on specific items or activities. Excise taxes are usually considered to be consumption taxes because they are designed to discourage the activity taxed. An example of an excise tax would be a tax on cigarettes.
7. Use Tax
A use tax is a tax on the storage, use, or possession of tangible personal property. A use tax is different from an excise tax because it applies to both tangible and intangible items.