Medicaid and Medicare
There are several programs and plans, either private or government-funded, that aims to provide medical assistance to individuals who met the certain requirements for qualification. In the United States however, the two most prevalent medical assistance programs are Medicaid and Medicare.
Medicaid is a medical assistance program sponsored by the government and pays for medical bills by using funds from taxes. Medicaid beneficiaries may have to make a very minimal co-payment for services during some occasions, but these happen very rarely.
Medicare is a health insurance also funded by the government, intended for aged individuals, particularly those aged 65 and above. In some instances, it could be available for those younger than 65 but with certain disabilities. The Medicare beneficiary would have to pay a premium for the services of Medicare. Some Medicare-approved private companies also offer Medicare insurance.
These two are often confused with each other. Both are government-backed programs but these two however, are different medical assistance plans. For one, requirements for eligibility are entirely different. Medicare is primarily for aged persons while Medicaid, on the other hand, could be provided for children as young as a year old! Medicaid focuses not on the age but more the individual’s income and physical condition. There are certain eligibility groups designated by Medicaid. The individual hoping to be granted Medicaid assistance must fit in at least one of those groups. Also, the types of medical assistance offered vary especially with Medicare. Another big difference is that the costs to be paid by the beneficiary are higher for Medicare services.
Tax Withholding in the United States
In the United States, federal payroll taxes are mainly accumulated by owners and managers on behalf of the Internal Revenue Service (IRS). The tax on income imposed by the federal government employs a system of direct withholding. The employers and bosses subtract a percentage of the taxpayers’ income straight from their payroll checks. Self-employed individuals, those who do not have employers, pay the government similarly. The withholding amount is computed based on the taxpayer’s estimated income and his living situation such as the taxpayer’s civil status, number of children if any, and other factors.
The annual tax of an individual is not computed by withholding flawlessly. The difference between the actual tax and the amount of tax withheld could either be paid straight to the government after the year ends or the government could reimburse it. There would be fines enforced on taxpayers who, during the year, do not have enough withheld or is unable to pay the assessed tax.
The amounts subtracted can be seen in IRS Publication 15 which is also called Circular E. For farmers, the rules are laid out and summarized in Publication 51, also referred to as Circular A. The IRS’s Publication 505 can also be utilized to assess the amount of tax withheld.
Some taxpayers prefer to withhold more of their assessed tax burden than what is required, using the withholding and the reimbursement check given by the end of the year, as a means of “forced savings”. This is at 0% interest. On the contrary, other taxpayers choose to withhold as low amount as possible, using the general rule that to prevent from being given the penalty for underpayment of assessed tax, the total amount of tax paid either at once or via installment by the 15th of April of the year subsequent to the tax year in question does not need to be greater than 100% of the tax liability previous year. Thus, these taxpayers pay a considerably big amount on April 15.
US Savings Bonds Basics
US Savings bonds are a secure way to invest your money for fail-safe revenue with backing provided by the government. Not only are these excused from local and state taxation, but these are also not subject to redemption tax as long as you do not redeem them within the first five years of purchase.
The profit you could gain is very substantial. Effective last November 1, 2008, the US Treasury declared the interest rates for bonds. For EE bonds, those bought between November 2008 and April 2009, the interest rate is 1.3%. For those bought between May 1997 and April 2007, the interest rate applied is 90% of the average 5-year US Treasury securities gains for the past six months. For those bought earlier than May 1997, the interest rate is different depending on when the bond was issued. For I bonds, 5.64% interest rate is applied to bonds acquired from November 2008 through April 2009. This rate is also applied for the first six months of the bonds acquired. After that period, a fixed interest rate of 70% will be applied for the life of the bond for up to 30 years.
Purchasing a US savings bond requires you to have a social security number and either be a resident of the United States or an American citizen living abroad. All civilian employees, regardless of their place of residence, are eligible to purchase a savings bond. Even minors are eligible.
For anyone planning to purchase US savings bonds, paper bonds are available in most financial institutions. For electronic bonds, you can acquire these online at Treasury Direct.
