Taxes are funded by governments in almost all the states. There are a variety of taxes that are collected by the government and used for the welfare of the mass. One such tax is the income tax. Income tax is basically calculation of tax on the basis of the salaries of the individual or businesses. Mostly the income tax is collected annually. That is, at the 12-month period and is generally known by the term fiscal year. It is essential to file income tax records for those who own small or large business.
THE POSITIVE FACE OF INCOME TAX
It is a thing to appreciate that the government mercifully collects income tax only from a positive income and not on the basis of net loss. Normally, income tax structures let an individual earn a basic non-taxable income. This is usually calculated on the basis of a standard deduction amount as mentioned by the IRS or state tax forms. If an individual’s income is less than the standard deduction amount, he is not liable to any income tax. This might be just a few thousand dollars, generally.
NEGATIVE ISSUES ON INCOME TAX:
A common problem faced by the employees is that the payroll department holds back a percentage of the employee’s income for tax purposes as they are obliged to do so by the government. Deductions of income tax are carried out by the state or federal government based on the earners marital or other dependencies.
TAX RATES FOR INCOME GROUPS:
As per tax law, the tax rates for different types of income groups are as follows:
ESTIMATING INCOME TAX:
It is a good practice to keep a record of the income tax payable by you. Especially for those who own a small or large business, it is essential to estimate the income tax payable. With the advancement of technology, estimation of income tax can be done easily without spending much time calculating manually. You may estimate the taxable amount by simply looking for an income tax calculator online. The calculator provided on the IRS website is the most accurate. It is possible to estimate the accurate income tax by simply filling in the required details requested by the calculator online and the amount is calculated on the basis of your income. So it is necessary to provide the most accurate information regarding your income so as to obtain a appropriate estimation of income tax.