Estimator Can Improve Your Tax Awareness and Enhance Financial Planning
WASHINGTON--(BUSINESS WIRE)-- With few Americans aware of the number and types of taxes they pay each year, the American Institute of CPAs’ Total Tax Insights calculator sheds light on the existence of 10 common taxes you may not know you’re paying.
The 10 common, but not widely known, taxes are among more than 20 factored into the Total Tax Insights calculator’s estimations. They are (ranked in no particular order):
|Medicare Tax||The amount withheld by your employer from your|
|paycheck that helps cover the cost of running the|
|Medicare program, the federal system of health|
|insurance for people over the age of 65.|
|Self-Employment Tax||A Social Security and Medicare tax for individuals|
|who work for themselves. It is similar to the|
|Social Security and Medicare taxes withheld from|
|the pay of most wage earners.|
|Alternative Minimum Tax||A mechanism created to ensure that individuals pay|
|at least some minimum amount of federal income|
|tax, regardless of deductions, credits or|
|Electricity or Natural Gas Tax||A tax collected by energy suppliers based on|
|consumption during the billing period.|
|Cable Tax||Tax imposed on cable television subscribers.|
|Landline Phone Tax||Federal and state tax associated with use of a|
|fixed phone line.|
|Cell Phone Tax||Federal and state tax imposed on mobile telephone|
|State Gasoline Tax||A tax on every gallon of gasoline sold.|
|Cigarette Tax||Tax on cigarette use.|
|State Alcohol Tax||Tax imposed on the purchase of beer, wine and|
“Most Americans’ tax awareness is limited to recognition of income, property and Social Security taxes,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “However, there are other taxes imposed by federal, state and local governments on energy consumption, phone use and television viewing, among other day-to-day activities. Our Total Tax Insights calculator can help you estimate your obligation for a wide range of taxes so you can factor those costs into your financial plans.”
Based upon the information provided by the user, the Total Tax Insights calculator estimates what the taxpayer is paying on an annual basis for more than 20 different taxes and provides a pie chart that shows the percentage of their total tax bill by category. The more information users provide, the more detailed their estimate will be.
“As Americans witness the national conversation about tax policy – including discussions regarding the ‘fiscal cliff’ – the Total Tax Insights calculator makes the debate more relevant for individuals by estimating the scope and impact of taxes where they live,” said Edward S. Karl, CPA, AICPA’s vice president for taxation. “Tax transparency, one of the AICPA’s principles in working for a better tax system, is of fundamental importance in making key decisions that can affect your financial well-being.”
The Total Tax Insightscalculator is a tax estimator tool only and is not intended to serve as an online tax preparation tool for either a federal or state income tax return, or any other return. A user’s privacy is protected because the Total Tax Insights calculator does not require individuals to identify themselves in any way and the data is erased when a user leaves the website.
About the AICPA
The American Institute of Certified Public Accountants (AICPA) is the world’s largest member association representing the accounting profession, with nearly 386,000 members in 128 countries and a 125-year heritage of serving the public interest. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.
The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination and offers specialty credentials for CPAs who concentrate on personal financial planning; fraud and forensics; business valuation; and information technology. Through a joint venture with the Chartered Institute of Management Accountants (CIMA), it has established the Chartered Global Management Accountant (CGMA) designation to elevate management accounting globally.
The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.
Media representatives are invited to visit the AICPA Press Center at aicpa.org/press.
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Source: American Institute of Certified Public Accountants (AICPA)