183-Day Rule

  

Taxes and residency. "Were you in the U.S. for 183 days or more?" If so, then you pay U.S. taxes, more or less. It's kind of the alien test, only with less, um...probing.

Related or Semi-related Video

Finance: What's the Difference Between F...145 Views

00:02

Finance, a la Shmoop. [title page] What's the difference between federal

00:07

and state taxes? All right, well, when the U.S. came together a quarter of a

00:13

millennium ago, it was the United States. See, right there in the title you get a [founding fathers pictured]

00:19

sense of the tension. We started out as just states. These things. Then, we came together [individual states on map]

00:27

and created a central government that kind of sort of had control over each of [government tries to control states]

00:31

the states, and well, you can imagine that not everyone agreed about every rule.

00:36

Some states wanted murder to be an offense punishable by death, while other [protesters picket]

00:41

states wanted it to be, you know, legal. Well, okay maybe not legal, but they

00:46

had different ideas about how you should deal with murderers... i.e., not all of them [person pushed into lion pit]

00:49

should be thrown into the lion pit. Anyway, this was all well and good when it just

00:54

involved local laws and customs. Local customs dictated local laws, and then

01:00

local taxes could be allocated accordingly. So they could pay for things [local laws and taxes diagram]

01:05

like a bouncy house for the mayor. But what happened when there was a threat of [mayor in bounce house]

01:09

military invasion? Well, what if Georgia wanted to fight

01:13

them commies, but North Carolina didn't? Yeah, that didn't work out so well. So [states argue over military]

01:18

for some things, there has to be a federal law that supersedes state law

01:23

and federal taxes that support those laws, like military spending. If only those [federal laws and taxes diagram]

01:28

pacifists in Maryland didn't want to spend money on guns, well, then what would

01:32

the rest of the country do? Yep, let Maryland start speaking Russian or [Maryland hippies hang out]

01:36

Chinese as the preferred language while the rest of the nation just watched [Maryland conquered]

01:39

while sipping their tea? Or in the United States' case, you know, eating doughnuts? Yeah. [Americans eat doughnuts]

01:44

So, military spending protects the entire country, and those expenses come out of [military budget chart]

01:50

federal taxes. National highways? Federal. Border Patrol? Federal. Space travel? [federal and local laws/taxes demonstrated]

01:57

Federal. Schools? State. Libraries? State. Little country roads? State... local.

02:04

You know... Or even smaller in the form of county

02:07

taxes as we get littler and littler... yeah. So federal taxes pay for all the big

02:12

stuff--the things that we share as unified Americans no matter what state

02:16

we live in, while state taxes pay for stuff particular interest to our little

02:20

local state, wherever it is. You know, like DC taxes aren't going to be used to

02:25

build a fire department in Minnesota. Stuff like that. [fire department in Minnesota]

02:27

Besides, Washington has their, you know, own fires to put out. [newscaster speaks]

Up Next

Finance: Why Do Taxes Exist?
138 Views

Why do taxes exist? Without taxes, Uncle Sam wouldn't be able to boss us around via the IRS, which uses taxpayer money to run the government. Those...

Finance: What are the Types of Income Tax?
65 Views

What are the types of income tax? Federal income tax. State income tax. Real estate tax. Value Added Tax (VAT). Some tax is progressive, some tax i...

Finance: What is the difference between progressive and regressive taxes (flat tax v. marginal tax)?
3066 Views

What is the difference between progressive and regressive taxes (flat tax vs. marginal tax)? In the most basic sense, progressive taxes affect the...

Find other enlightening terms in Shmoop Finance Genius Bar(f)