Filing taxes is a fundamental civic duty. The taxes we pay are used to fund the public services that we all enjoy. Yet, there are other benefits of paying taxes that you may not be aware of. Read on to learn about the many benefits of paying taxes.
1. Having a reliable record
Paying taxes is one of the best ways to identify yourself as a rule-abiding citizen. This is because it serves as a clear record of the years you've lived in this country and paid your dues. If your goal is to stay permanently in the United States this can be a huge benefit of paying your taxes. Having a history of tax returns and income received in the United States can be used to prove the length of your stay.
2. Getting education for your children
Another one of the benefits of paying taxes is being able to send your children to public schools. These institutions prepare them for the future, either to continue studying at a college or university or to enter the job market. Thanks to your tax contributions, you do not have to pay for their elementary and high school education, and in some cases children are even fed at school.
3. Counting on vital emergency protection and assistance
Yet another one of the benefits of paying taxes is receiving first responder services such as the police and the fire department in the event that an incident occurs. Your city government funds these efforts using the taxes that we all pay.
4. Maintaining safe and reliable roads
One of the public services that we all use is our extensive road network. Keeping these roads in good shape and building new ones are two of the most important things that our government does with our tax dollars. Taxes also fund the maintenance of parks, recreational areas and other places that we all enjoy. Road expansion and maintenance are two of the main benefits of paying taxes which allow you to safely and easily travel to your destination.
5. Fulfilling a civic duty
Paying taxes is required to be in compliance with state and federal tax laws. In order to be a law-abiding citizen it is of utmost importance that you keep your taxes up to date. It doesn't matter if you weren't born in the United States—by using the goods and services of a country and a state, you must contribute with the timely and full payment of your corresponding taxes.
6. Getting credits on your tax returns
One of the most important benefits of paying your taxes is that the U.S. government created a system of credits and deductions that allow you to reduce the amount of taxes you pay. Thanks to these credits and discounts you can even get a tax refund at the end of the year, but you will not get a refund if you don't file your taxes. You can learn more about deductions and credits in our in-depth guide.
7. Getting credits on your health insurance
Ask your tax advisor about reducing or getting help paying for your health insurance premiums. Another great benefit of paying taxes is the fact that there are laws that give credits on insurance premiums to those who meet their tax obligations on time.
8. Having access to government benefits
Another one of the benefits of paying taxes is that if your income is low and you need financial aid, you can obtain government benefits to help you with medical, food, rent, and even gas or electricity expenses. Note that this is dependent on being legally enrolled in the IRS Taxpayer registry.
9. Receiving tax refunds
The biggest benefit of paying taxes is probably the fact that you can get a payment from the government if you are eligible for a tax refund. The IRS prides itself on issuing 9 out of every 10 returns in less than 21 days. The fastest way to receive your money is by using a debit card. If you are going to receive a refund and you link a bank account, receiving the refund is faster.
Filing taxes is serious business, so always keep an eye out for people posing as tax experts that offer their services without the proper training to do so. Make sure the agency or person preparing your tax return has a PTIN—this is the preparer tax identification number required by law.
The Individual Taxpayer Identification Number (ITIN)
Anyone who works or earns money in the United States must file a tax return, no matter your legal status. To file your tax returns, you will require a social security number or, if you are not eligible for it, a tax identification number known as ITIN. In order to request an ITIN, you will need to fill out a W7 form. You can learn more about obtaining your ITIN here.
Benefits of having an ITIN
- It serves as a tax ID in the United States.
- It gives you access to refunds from IRS withholdings.
- It allows you to list family dependents, regardless of whether they live legally in the United States or not.
- It gives you the option to apply for a child tax credit.
- It can serve as identification to open a bank account.
- It can also be used as a tool for applying for a mortgage loan.
Keep in mind that the ITIN does not represent an authorization to work in the United States.
Change your views on paying taxes
You have probably heard the common saying that goes: “nothing is certain except for death and taxes”. But remember that there are many benefits to paying taxes aside from the obvious tax refund! Another thing to always keep in mind is that the main beneficiaries of paying your taxes are you and your family.
If you tended to think that paying taxes was a burden prior to this, we hope that this article has changed your mind. We promise that focusing on the benefits of paying taxes will make the paperwork easier!