Wednesday, February 27, 2013

Where Do My Income Taxes Go?

It's that time of year again--tax season. If you've ever wanted to know just where all that money goes, now it's easy to find out--or at least get a decent estimate. For federal taxes, the easiest way is to use the White House website's Your Federal Tax Receipt page. You can enter your income tax, Social Security tax, and Medicare tax, and see a breakdown of where the money was spent. If you don't know the exact numbers, you can also estimate your taxes. For example, here's an estimate for a married couple with two kids, with a household income of $80,000. You can click on the plus signs next to each category to see more details.


The White House tax receipt page is currently showing tax receipts for the 2011 tax year, so it won't give an exact figure for where last year's taxes will go this year. Still, it's a decent estimate. There all other similar sites, but all these sites have pros and cons. The White House site is the most recent, and more accurate because it lets you enter income, Social Security, and Medicare taxes separately, but it doesn't break down spending in as much detail as the next two sites:

WhereDidMyTaxDollarsGo.com gives a breakdown of where your taxes from 2009 went in 2010. It's less accurate than the White House site because it only gives an estimate of the taxes you paid based on income and filing status, but it has better graphics, and gives a more detailed breakdown of how much money went to each government agency.


Another site, WhatWePayFor.com, gives a detailed account of the federal budget for many years up to 2013, but it will only estimate where your taxes went up to 2010 (enter 2010 or a previous year to see your share). Both of these websites are based on the same data, but they use different assumptions about what deductions people will claim, so they give slightly different estimates. To get the best overview of where your tax dollars go, you may want to look at all three to get a range of estimates.

There's no tax receipt website available for Louisiana income taxes, but the LA TRAC website has links to information about state revenues and spending. Another useful resource is the Louisiana Popular Annual Financial Report, which is published every year. The report for fiscal year 2012 is available here.

Filing Your Tax Return

Many tax forms and instructions are available at all the branches of the library. We have the 1040 EZ, 1040 A, and 1040 forms, and the instructions for 1040 A and 1040 EZ. We don't have the 1040 instructions yet, because they were printed late, but they have finally shipped, and should be at the Main Library by March 5.

Both the state and federal government are pushing to abandon paper filing and get people to file online. One advantage of doing this is that if you qualify for a refund, you'll get your refund faster. If you're comfortable filing online, you can do so at www.irs.gov/Filing. The Free File program lets you do your taxes online for free in one of two ways: You can access fillable electronic forms and submit those, or--if you make $57,000 or less--you can use online tax preparation software through several companies that make their products available free for people in certain income levels. Many of these allow you to file your state income taxes for free, too, if you meet the income requirements, but you can also file your state taxes online at the Louisiana Department of Revenue website. If your income is higher than $57,000, or you use a tax professional, the IRS site also has options for e-filing that way.

If you make $50,000 or less, you can get your taxes done for free at the Main Library by the kind volunteers with VITA (Volunteer Income Tax Assistance), a program run by Catholic Charities. VITA is at the Main Library from 9-2 on Tuesdays and Saturdays, through Tuesday, April 9th (except March 30, when the library will be closed). For more information about the VITA program, go to bit.ly/vitainfo.

If you have any questions, give the Reference Department a call at 876-5861, option 2. Good luck with tax season!

1 comment:

Jillian Johnson said...

Thanks for sharing this post! I'm no tax expert and I don't really understand them that well. For the first time, I decided to do taxes online and the process was simple and fast!