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Facts - Books - News    U.S. Facts Of Law:


Federal Income Tax

Federal income tax accounts for the majority of the income collected by the federal government.  It is collected both from individuals, corporations and some other entities.  The federal income tax system is a progressive system of higher tax rates on higher income earners.

Income taxes are collected by employers through out the year through a mandated payroll withholding system.  The withheld taxes are deposited with the Internal Revenue Service (IRS) under the employee's name.  When the employee files his federal income tax return he is credited for the amount of taxes collected by his employer.  If the taxes collected were less than owed, the employee sends in the difference with his income tax return.  If he over paid, the government will issue a refund to the employee.  The IRS does not pay interest to the employee on the money it holds for him.

Over the years, Congress has fiddled with the tax code to provide incentives to make certain investments or for corporations to develop certain products.  Examples include the income deduction for interest paid on a mortgage and the income deferral on money placed in an approved retirement plan.

Congress has also made the federal income tax a progressive tax.  As an income earner's taxable income increases, so does the rate at which it is taxed.  Believing the wealthy should bear the burden of paying most of the taxes, Congress has skewed the tax code against them.  The IRS reports that the 2005 tax data shows:

Income Earners Pays This Percentage of All Personal Income Taxes
Top 1% 38.8%
Top 20% 86.3%
Top 40% 99.4%
Bottom 60% - 00.6%

It is obvious from this data that those making over $60,000 per year (approximately the top 40%) pay nearly the entire income tax burden.

 

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45 Of Tax Filers Will Owe Nothing In Federal Income Taxes This Year CNNMoney
CNNMoney 45 of tax filers will owe nothing in federal income taxes this year CNNMoney Others, meanwhile, don39t make a lot and can eliminate their federal income taxes through the use of the now nearly doubled standard deduction and some key credits such as the earned income tax credit and the child tax credit, which offset your tax and more raquo

45 Of Tax Filers Will Owe Nothing In Federal Income Taxes This AZFamily
AZFamily 45 Of tax filers will owe nothing in federal income taxes this AZFamily It39s always a little surprising. In good times and bad, at least 75 million US households have ended up owing nothing in federal income taxes in recent years. and more raquo

45 Of Filers Will Owe Nothing In Federal Income Taxes This Year WISC Channe...
Channel3000.com WISC TV3 45 of filers will owe nothing in federal income taxes this year WISC Channel3000.com WISC TV3 It39s always a little surprising. In good times and bad, at least 75 million US households have ended up owing nothing in federal income taxes in recent years.

How Amazon And Entrepreneurs Can Pay Zero Federal Income Tax Entrepreneur
Entrepreneur How Amazon and Entrepreneurs Can Pay Zero Federal Income Tax Entrepreneur With the recent news that Amazon paid zero federal taxes for 2017, every entrepreneur should be asking, :quotHow can my company pay no taxes, and legally, too and more raquo

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Facts of Law about the federal income tax

Facts of Law - Federal Income Tax