MANAGEMENT

Detailed explanation-1: -Federal income taxes are collected by the federal government, while state income taxes are collected by the individual state(s) in which a taxpayer lives and earns income.

Detailed explanation-2: -Federal income tax applies to everyone As such, it applies to everyone in all 50 states – it doesn’t matter in which state you live. Federal income tax law divides individuals into 7 tax brackets based on income, with the lowest bracket set at 10% and the highest around 39%.

Detailed explanation-3: -Income up to the standard deduction (or itemized deductions) is thus taxed at a zero rate. Federal income tax rates are progressive: As taxable income increases, it is taxed at higher rates. Different tax rates are levied on income in different ranges (or brackets) depending on the taxpayer’s filing status.

Detailed explanation-4: -The IRS is a bureau of the Department of the Treasury and one of the world’s most efficient tax administrators. In fiscal year 2020, the IRS collected almost $3.5 trillion in revenue and processed more than 240 million tax returns. The IRS spent just 35 cents for each $100 it collected in FY 2020.

Detailed explanation-5: -The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; . . .