As we approach the holidays, it’s important to remember the two eternal truths—death and taxes. And this holiday season, I can assure you that you’ll experience the latter. Below are three examples of the hidden taxes that you may come across during your festive celebrations:
1.) Travel taxes: Last year, over 100 million Americans hit the roads or took to the sky during late December and because of taxes, those trips got a lot more expensive. If you choose to drive, roughly 45 cents of state and federal taxes will be tacked on to every gallon of gas purchased. Choose to fly instead? Airline tickets within the continental U.S. are subject to a 7.5 percent tax, a $5 to $10 security tax, and a $4 federal segment tax. When all is said and done—including travel, hotel, car rentals…etc.—a three-day trip could cost you over $100 in taxes.
2.) Sales taxes: Holiday shoppers spent over $1 trillion in 2016 and a big portion of that went to sales taxes. Some states—including Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee—haves rates as high as 7 percent and others, like California, can hit 7.5 percent. When Americans are spending big bucks on holiday gifts, those taxes can really add up.
3.) Holiday bonuses: If you are lucky enough to receive a holiday bonus, more than likely, it’s going to be heavily taxed by the government. This not only includes cash payments, but any gift of monetary value—such as a gift card, bottle of wine, or iPad. In some cases, half of your holiday bonus may go to Uncle Sam.