What do you need to know about income tax

Income tax is the largest source of federal budget revenue. It is charged from personal income of the residents, including income from individual business. Income tax implies the existence of a tax-exempt minimum and certain discounts, as well as various personal expenses (for example, transportation costs, contributions to charitable foundations, child care expenses, medical expenses within certain limits, etc.).

Income taxes are also levied in almost all states and they are not so fiscal, but rather used as a method of influencing the economic situation. Almost all states levy property taxes, which are paid by both individuals and legal entities. Tax rates vary from 0.5 to 5%. In addition, states levy inheritance tax, excise taxes, capital tax and license fees, and employers make mandatory contributions to unemployment benefits.

How to file a tax return?

It is filed at the beginning of each year: from January 1 and the deadline is April 15. All you have to do is to choose a tax form (there are several forms, depending on your situation), use the calculator, fill in this form, attach some documents if necessary – and send them to the IRS. You can print out the form, fill it out by hand and send it by post, or you can submit it electronically on the IRS website, or you can use some numerous services for a small fee.

In addition to the states, there are almost 85,000 districts under the jurisdiction of local governments in the United States as administrative entities. Almost all states are divided into counties, with approximately 20,000 municipalities. Counties, municipalities, and townships (specific territorial units) have their own general-purpose governments that provide services within the area. Each self-governing body can create its own budget, introduce taxes and take various steps to ensure that it receives revenues.

Different companies can involve professionals in the preparation of tax returns. For example, this company will help you with tax preparation tucson https://southwesttaxassociates.com/. Use this service if you need some professional help with your taxes.

Tax reporting and compliance in the United States

  1. Fiscal year. 1 January – 31 December, however, legal entities have the right to choose other dates of the regulatory economic year at their discretion.
  2. Consolidation. The U.S. Group of entities may maintain consolidated financial statements provided that the parent company owns more than 80% of the shares of its subsidiaries.
  3. Deadlines for submission of tax returns. Tax returns must be submitted to the tax authorities by 15 day of the third month after the end of the reporting period. Terms of tax payments are determined directly by the legislative regulation of each type of tax.
  4. Tax penalties. Federal legislation provides various penalties for intentional or accidental evasion of tax payments, as well as for delays in payment of tax liabilities and for misrepresentation of tax reporting information. Taxpayers pay interest on the amounts of underpaid tax liabilities in accordance with the norms established by the tax authorities in the given period.
  5. Tax regulation. Taxpayers are entitled to request an individual procedure for the settlement of their own federal tax liabilities.
[an error occurred while processing the directive]