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The 10 Biggest Things Your Income Taxes Pay For

OVER SAN FRANCISCO BAY - MARCH 16:  In this handout image provided by the U.S. Air Force, two F-16 Fighting Falcons begin to roll into position for a rapid descent during an Operation Noble Eagle training patrol March 16, 2004 over the San Francisco Bay, California. The F-16s are assigned to the California Air National Guard's 144th Fighter Wing in Fresno, California.  (Photo by Lance Cheung/U.S. Air Force via Getty Images)
Lance Cheung/U.S. Air Force via Getty Images
Now that tax season is over (except for those who filed for an extension), it's natural to wonder exactly where the hard-earned dollars you paid in tax over the past year actually went.

To answer that question, the White House put together a website that gives details on the government's expenditures. Dubbed the Federal Taxpayer Receipt, you can enter in your income, Social Security, and Medicare taxes and get a personalized look at where your tax dollars got spent. Understanding that Social Security and Medicare taxes go toward funding those respective programs, here are the 10 areas where the greatest percentage of income tax revenues gets spent.

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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Joe Bradley

you say 8% pays the interest to our debt, well what about the actual money we borowed from them? what pecent is that

November 23 2014 at 6:34 AM Report abuse rate up rate down Reply
Christopher Lee

Tax code should help to create US Jobs

Owner Cel Financial Services
IRS Registered Tax Return Preparer
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Please visit my website for all your Income Tax Fillmore needs.

May 16 2013 at 2:11 AM Report abuse rate up rate down Reply

A couple of them are obama's vacations and obama's childrens' vacations in the Bahamas.

April 26 2013 at 4:50 PM Report abuse -1 rate up rate down Reply
Welcome SCB!

2nd comment: I do not think it is wise to permit companies to become \'large.\' (No, I cannot define \'large.\') I remember when AT&T was broken up because they were too large, too controlling of their area of expertise. Then, suddenly, it became OK for companies to become as large as AT&T was, even larger. Now companies and their \'associated partners\' are HUGE! HUGE means \'in charge\' of the money, one way or another. They are \'larger\' than many countries which might even play out even if they were forced to be smalle. This level of control is of considerable concern to be - and the more money they make, the more they \'take care of \"The People\" (think insurance companies for example) or force the government to do so because \"The People\" are becoming poorer and poorer. And I would like to have the government of \"The People\" take over banking - let the Federal Reserve work for \"The People\" instead of the attorneys in congress and the corporations and their associates. Now corporations and banks are invaluable and needed, but much needed by \"The People\" - that is needed in \"The People\'s\" corner! The fiscal problems today might also be lessened if the laws - rules and regs - set up after the depression to prevent another despression had not been slowly but surely eroded since the depression, the last one under the auspices of Clinton. Importantly to all of this, the commercial banks need to be separated from \"The People\'s\" banks - like they used to be. Ah, yes, it\'s easy to jot these thoughts down - but many of our changes over the last half century and before need to be seriously evaluated - results researched - and appropriate changes made..

April 26 2013 at 4:16 PM Report abuse rate up rate down Reply
Welcome SCB!

I read that ~75% of our legislators are attorneys. Sorry, I don't recall the source. Maybe Charlie Reese (quoted, in this group of comments) could check that out. If valid, I doubt if "The People," per se, are actually represented. I wonder what would be on the agenda if "The People" actually represented us in Congress. Lawyers could work to help "The People" put items in appropriate legal language - but be required to keep them short and understandable. I've thought about this since I read the item and I pass it on for consideration. Is there any way we might assure representation by "The People" for "The People?"

April 26 2013 at 3:56 PM Report abuse rate up rate down Reply

8% interest to pay debts to the Mammon Federal Reserve. The prinicipal will never get paid. Federal Reserve is getting ready to takeover America. Federal Reserve Motto - "BEND OVER".

April 26 2013 at 1:18 PM Report abuse +1 rate up rate down Reply
Jay P Cote

You mention #5 Vetrans benefits, but no mention of your beloved Union worker pension benefits, what hipocritical clowns you are, should have know if this White House put this out it would be a crock of BS from that gang of bumbling idiots

April 26 2013 at 12:12 PM Report abuse +2 rate up rate down Reply
Ol Bob

Is anyone fool enough to believe the government would tell the truth about where our taxes are squandered? At least nine out of the ten are PORK.

April 26 2013 at 11:47 AM Report abuse +1 rate up rate down Reply

Over the decades government has dipped into the Social Security Trust Fund. Social Security and Medicare have been PAID for by employee payroll taxes and taxes on their employers.
The well is going to run dry? So we need to cut benefits? NO, find another fund to raid! Get rid of Congressional retirement benefits! IOU\'s don\'t do us a bit of good. Don\'t \"borrow\" The Peoples money if you can\'t replace it promptly!
Baby Boomers have paid in enough Social Security taxes to cover theirs and the following generations Social Security benefits
I don\'t want to hear about cutting SS.

April 26 2013 at 10:34 AM Report abuse +2 rate up rate down Reply

Most of them are tolerable. It's the generational welfare programs, euphemistically called "Social Assistance", which is the back-breaker. Getting absolutely NO return on the "investment", as Obuma would put it.

April 26 2013 at 10:14 AM Report abuse rate up rate down Reply