In this section we will provide an overview of different tax terms and files to help understand the system.
Federal taxes refer to the taxes imposed by the U.S. government on individuals, businesses, and various transactions to fund government operations and public services. These taxes include income taxes, payroll taxes, excise taxes, and other levies collected by federal agencies such as the Internal Revenue Service (IRS).
State taxes are levies imposed by individual U.S. states on income, sales, property, and other transactions to generate revenue for state government expenditures and services. Each state has its own tax laws and rates, determining how residents and businesses contribute to state funding.
Tax files typically refer to documents and forms containing financial information that individuals, businesses, or entities submit to tax authorities to fulfill their tax obligations. These files include items such as income statements, receipts, and other relevant documentation used to calculate and report taxable income, deductions, and credits.
Tax terms encompass the various terms and concepts related to taxation, including terms like deductions, credits, taxable income, and filing status. Understanding these terms is essential for individuals and businesses to navigate the tax system, accurately report their financial information, and fulfill their tax obligations.