What Is Federal Income Tax?

[devinluke]

What is Federal Income Tax? 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]

Federal income tax is the tax the U.S. government collects on the money you earn from jobs, business, or investments.

 

[brook]

Federal income tax The tax that the United States government has to collect on the income that you earn due to jobs, business or investments.

 

[Jarwish]

Federal income tax is a government levy on individuals’ and businesses’ earnings. It funds public services, infrastructure, and programs, with rates varying based on income levels and filing status.

 

[lara]

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.

 

[deepak]

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.