What Is Federal Income Tax?
- Thread starter devinluke
- Start date
I know it’s something deducted from our income, but I’d like to understand how it works, who pays it, and why it’s important. Can anyone explain in simple terms with maybe an example?
Rick_Grimes
Member
Federal income tax is the tax the U.S. government collects on the money you earn from jobs, business, or investments.
The federal income tax is an income tax imposed by the United States federal government. Employers must collect federal income tax through a withholding mechanism that deducts the tax from their employees' wages. To submit taxes on time, employers must follow the IRS-determined tax schedule.
Federal income tax is a tax imposed by the federal government of the U.S. on the income of an individual or business. It finances government programs, defense, infrastructure and government services. This tax is progressive i.e. higher levels of income are taxed at higher rates and it is generally reported and paid yearly to the IRS.
stevesmith
Member
Federal income tax is a tax that the U.S government levies on income that is earned by individuals and businesses. It is applicable to wages, salaries, interest, and profits and subsidizes the services of the State, including defense, infrastructure, healthcare, and education.
Federal income tax is a tax collected by the U.S. government on individuals’ and businesses’ earnings. It funds public services like defense, healthcare, infrastructure, and education. The tax is progressive, meaning higher incomes are taxed at higher rates, and it’s usually withheld from paychecks.