Do Amish Pay Taxes?
Do Amish pay taxes?
The Amish live a life that is dramatically different from the average American, so it’s natural to wonder what parts of their lives vary from ours. They generally live without electricity and modern comforts and dress in plain clothing. You may also wonder if this religious group pays taxes, as it often seems that they are separated from society.
Do Amish pay taxes?
The answer is yes – the Amish do pay taxes. However, there are some exceptions. There are a few taxes that Amish may qualify for exemptions from due to religious reasons.
What taxes do the Amish pay?
Amish pay Federal and state income taxes. They’re also subject to any local taxes and property taxes if they own property including farmland. And while Amish usually send their own children to their private religious schools, they’re still required to pay local school taxes where they live.
When it’s tax time, those in an Amish community may choose to file their own taxes or hire an accountant to help with their return. If an Amish person is a business owner, they are also responsible for any business taxes that are applicable to their situation.
Amish also are responsible for paying sales tax, depending on the state where they reside. If they reside in a state where sales tax is assessed at the time of purchase and they’re making a purchase in a store, they’re charged sales tax just like anyone else.
What taxes are Amish exempt from?
Amish are exempt from paying taxes related to Social Security and Medicare under FICA, the Federal Insurance Contributions Act. They also do not pay unemployment taxes to fund FUTA, the Federal Unemployment Tax Act. These exemptions are based on religious beliefs. As such, anyone who qualifies for the exemption must also refuse receipt of the benefits provided by the programs – so in this case, unemployment, Social Security, and Medicare.
You generally see these lines on your paycheck as your employer withholds this money from your wages for you. If you’re self-employed, you pay these via your self-employment taxes when you file either quarterly or annually. Paying these taxes ensures that you can participate in the benefits of Social Security, Medicare, and unemployment, depending on the type of tax you’re paying into.
To qualify for an exemption, there is a process you must follow. You have to file a form with the IRS to request an exemption and certify your religious beliefs. You must also certify with the government that you will not accept any of the benefits of public insurance, such as Social Security, unemployment, or Medicare.
This can be a long process, and the IRS will look into your case to make sure that you’ve never received these benefits in the past. To qualify for the exemption, the IRS must approve your application, and then your exemption will go into effect. Anything you earned prior to the approval of the exemption doesn’t apply to the exemption and would be paid into those taxes.
If an Amish person is working for an employer that does not have the exemption, that employer will still withhold those taxes even though the Amish person may not ever participate in the benefits. The same holds true if an Amish business employs non-Amish workers – they must then withhold those taxes for their employees.
Within certain states, the Amish may also be exempt from insurance programs such as Worker’s Compensation. In the event that an Amish person does become injured at work, they are typically cared for within their community and do not rely on insurance programs.
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