What is Income Tax?

What is Income Tax?

Income tax is a government's method of gathering revenue to fund its operations.  Income taxes can be levied by the Federal government, State governments, and local governments.  Income taxes are normally based upon an individual's total income for a taxable year, or  business profit and loss.

U.S. residents and some foreign residents are subject to income taxes.  State income taxes vary greatly between States.

When calculating income taxes, one must consider tax exemptions, tax exclusions, and tax adjustments.  After adjusting for these items, an income base is developed.

The income based calculated is normally multiplied by a tax rate to determine the amount of income tax liability.

Our firm files income taxes for our clients in all fifty States and some foreign countries.