MANAGEMENT

Detailed explanation-1: -A taxpayer may be an individual or business entity that is obligated to pay taxes to a federal, state, or local government. Taxes from both individuals and businesses are a primary source of revenue for governments. Individuals and businesses have different annual income tax obligations.

Detailed explanation-2: -Which type of tax is paid by businesses? In general, businesses pay taxes on their net income. However, who pays those taxes depends on the structure of the business. For example, income tax is passed on to the owners or partners in sole proprietorships, LLCs, S-corporations, and partnerships.

Detailed explanation-3: -Congress used the power granted by the Constitution and Sixteenth Amendment, and made laws requiring all individuals to pay tax. Congress has delegated to the IRS the responsibility of administering the tax laws known as the Internal Revenue Code (the Code) and found in Title 26 of the United States Code.

Detailed explanation-4: -Corporate Income Taxes A corporate income tax (CIT) is levied by federal and state governments on business profits, which are revenues (what a business makes in sales) minus costs (the cost of doing business).

Detailed explanation-5: -Federal income taxes are collected by the federal government, while state income taxes are collected by the individual state(s) where a taxpayer lives and earns income. (It can get complicated if you live in one state and work in another, which happened more frequently during the pandemic.)