ENTREPRENEURSHIP

Detailed explanation-1: -Federal taxes are taxes that you pay to the federal government, rather than to the state or local government. Personal income tax and payroll tax are the most common types of federal taxes that you will likely run into.

Detailed explanation-2: -Tax is collected from individuals and corporations by the city, state, or country where they reside or operate. When the tax collected is credited to the country’s government, it is referred to as a federal tax. Governments use the money collected through federal taxes to pay for the growth and upkeep of the country.

Detailed explanation-3: -The U.S. has a progressive tax system, where portions of a person’s taxable income can fall into different brackets to be taxed at different rates. A marginal tax rate is the highest tax rate a person’s income is subject to. Tax brackets are adjusted each year to account for inflation.

Detailed explanation-4: -The highest-earning Americans pay the most in combined federal, state and local taxes, the Tax Foundation noted. As a group, the top quintile-those earning $130, 001 or more annually-paid $3.23 trillion in taxes, compared with $142 billion for the bottom quintile, or those earning less than $25, 000.

Detailed explanation-5: -A U.S. resident’s income is generally subject to tax in the same manner as a U.S. citizen. If you are a U.S. resident, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return.