We pay taxes every year, but do we really know where our hard-earned income goes? Today, we take a deep dive into the top three areas your tax dollars benefit every year!
1. Social Security
In 2017, $945 billion tax dollars paid for Social Security. Social Security, also known as Old-Age, Survivors, and Disability Insurance (OASDI) is more than for the retired! Social Security benefits help the disabled, spouses or children of those who have died, dependents of workers who have died, and other tragic circumstances. Essentially, for every dollar you pay toward Social Security, $0.85 goes to a trust fund that benefits retirees and families with surviving spouses or children that have died. In addition, the remaining $0.15 or so goes to a trust fund that benefits people with disabilities and their families.
If you are interested to see if you qualify for Social Security benefits, click HERE.
2. Medicare, Medicaid, CHIP, and Marketplace Subsidies
In 2017, 26%, or $1 trillion of all American tax dollars went toward Medicare, Medicaid, CHIP, and Marketplace Subsidies.
Medicare
Medicare is a federally-run government health coverage program designed for those qualifying for Social Security regardless of income. There are many facets of Medicare, and different people qualify for different aspects based on their needs. If you are collecting Social Security benefits, you'll automatically be enrolled for hospital insurance known as Medicare Part A and Medicare Part B, social security benefits. However, you may be able to drop Medicare Part B if you desire. There is also a Part C, known as Medicare Advantage. These plans offer the same benefits as Parts A and B as well as Original Medicare; these can also offer additional benefits like prescription drug coverage. Based on your needs, you can get coverage for many preexisting conditions as well as general health care coverage.
If you are interested to see if you qualify for Medicare benefits, click HERE.
Medicaid
Medicaid is another health coverage program at the state and federal level. Unlike Medicare, Medicaid is designed specifically for low-income families. However, you can be eligible for both Medicare and Medicaid. As of April 2019, 65.7 million people are covered by Medicaid in the United States. There are certain mandatory benefits required under Medicaid, including hospital services, transportation to medical care, health clinic services, family planning services, and more! There are additional optional benefits depending on the state you live in; these include prescription coverage, physical therapy, dental services, and more!
If you are interested to see if you qualify for Medicaid Benefits, click HERE.
CHIP
Children's Health Insurance Program, or CHIP, provides health care coverage to children and is jointly funded by the federal and state governments. This is an expansion of Medicaid and applies to children of low-income households under 21 years old. The goal of CHIP is to provide early detection and care, so illnesses can be diagnosed and treated as early as possible. CHIP beneficiaries can also choose to have CHIP coverage at different levels depending on their needs. CHIP benefits include hospital services, well-baby/well-child benefits, dental benefits, behavioral health benefits, and more!
If you are interested to see if you qualify for CHIP Benefits, click HERE.
Marketplace Subsidies
Lastly, marketplace subsidies are government subsidies designed to reduce premiums and out-of pocket expenses in an effort to make healthcare more affordable. These occur under the Affordable Care Act (ACA) and usually come in the form of a premium tax credit; in addition, you may qualify for these automatically under Medicare or Medicaid.
3. Defense and International Security Assistance
Approximately $611 billion goes toward defense and international security assistance. Much of this benefits the Defense Department, but it also goes toward overseas operations such as the Overseas Contingency Operations program.
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Disclaimer: The views presented in this post are meant as educational resources and should not be taken as direct advice for your personal finances or small business. Should you have questions regarding a post relating to your specific finances, please contact us at info@practicalaccountingva.com.