Taxes finance government operations—education, infrastructure, healthcare, defense, and social programs—and take forms such as income, sales, payroll, and property taxes; non-payment can incur penalties, interest, or legal action.

Deductions subtract allowable expenses from taxable income, while credits directly reduce tax owed; leveraging both, alongside accounts like Roth IRAs and documented work or education expenses, legally minimizes overall tax burden.

Federal, state, and local governments allocate tax revenues according to budget appropriations, with major shares devoted to healthcare (Medicare/Medicaid), Social Security, defense, and education; public transparency tools (e.g., USAspending.gov) enable citizen oversight.

Filing requirements depend on income thresholds and employment status; taxpayers gather W-2/1099 forms, choose electronic or paper submission, claim deductions/credits as applicable, and file by the annual deadline to avoid penalties and receive refunds.