 What do you think you'll spend the most money on in your lifetime? A house? A car? An indoor water slide that everybody told you not to get? Nope. It's taxes! My name is Lisa Prudenzio, and I'm a personal finance expert here to help you navigate tax season. The more you know about the basics of taxes, the more you'll be able to utilize tax strategies that'll save you hundreds or even thousands of dollars. And that means more money freed up for the finer things in life. Welcome to Cash Class, where we make topics like money and building wealth easy to understand. What are taxes anyway? Taxes were established in the United States by a bunch of old white guys after the Civil War to help pay for the war. This came in the form of an income tax. An income tax is a tax imposed by governments on individuals and businesses on the income they make. You might be wondering, where does all this money go? Your income tax helps pay for things like healthcare, food safety, veterans benefits, national defense, and most importantly, other stuff. But wait, there's more. Think of each government like it's a separate business that needs funding to pay its employees, to provide public services, to run programs and more. Federal income taxes help cover nationwide programs like Medicare and National Defense. Everyone with an income has to pay federal taxes. State income taxes help fund state programs. For example, education and transportation. Most but not all states collect an income tax. Finally, local income taxes may be collected in some towns, cities, counties or school districts. Do you make money? Do you ever plan on making money? Of course you do. And that means you're going to have to pay taxes. Knowing the basics of how taxes work is going to help you put more money back in your pockets. In all of your pockets. Learning more tax strategies can help you build wealth. Taxes don't have to be scary or complicated. In the next episode, I'll break down some vocabulary and give you some tips to help you navigate tax season with ease. See you next time!