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Personal income tax law is the laws set forth by the government regarding personal income taxes, how they are figured, how they are paid, and so on. Everyone is subject to taxation based on personal income tax law. Taxes need to be paid every year as you go, and people who make more money pay higher tax rates than those who make less money. Here is a look at some aspects of personal income tax law and how the income tax system really works.
Who Is Subject?
Every single person, company, organization and non-profit group is subject to income tax law. Individuals that work and receive wages are subject to personal income tax law. What it means to be subject to income tax is that these people are required by law to report their income, calculating and paying their taxes accordingly. Some groups and organizations may be exempt from the tax laws, but all individuals and private citizens are required to pay. Even if you do not owe any money to taxes, you are still required to be filing an income tax return every single year.
What Is Being Taxed?
What you are being taxed on is your income, and income is any money that you earn from working or from investing. Income can include wages, dividends, interest, profits on investments, pensions and so on. Income does not, however, include gifts. You will not be taxed on any gifts that you receive, such as scholarship or an inheritance for example.
When Are Taxes Paid?
According to personal income tax law, your income taxes should be paid throughout the year in the form of pay-as-you-go taxes. Your taxes are generally going to be taken out of your paycheck at each pay period, and they are directly sent to the federal government as a result. By the end of the year, you will have paid a certain amount of taxes. If you paid more than the amount that you actually owed based on your tax bracket, then the government will refund whatever amount is owed back to you in the form of a tax refund.
If you have not paid enough money to cover what you owe for taxes, then what you have is a balance due. This balance due has to be paid by April 15, which is the tax deadline date, or otherwise interest and penalties will be charged by the IRS on whatever amount has not already been paid.
Tax Benefits
You can arrange your financial affairs in order to take advantage of the many tax benefits that are available. You can reduce your tax payments by managing your finances in such a way that your taxes are minimized.
Who Is Subject?
Every single person, company, organization and non-profit group is subject to income tax law. Individuals that work and receive wages are subject to personal income tax law. What it means to be subject to income tax is that these people are required by law to report their income, calculating and paying their taxes accordingly. Some groups and organizations may be exempt from the tax laws, but all individuals and private citizens are required to pay. Even if you do not owe any money to taxes, you are still required to be filing an income tax return every single year.
What Is Being Taxed?
What you are being taxed on is your income, and income is any money that you earn from working or from investing. Income can include wages, dividends, interest, profits on investments, pensions and so on. Income does not, however, include gifts. You will not be taxed on any gifts that you receive, such as scholarship or an inheritance for example.
When Are Taxes Paid?
According to personal income tax law, your income taxes should be paid throughout the year in the form of pay-as-you-go taxes. Your taxes are generally going to be taken out of your paycheck at each pay period, and they are directly sent to the federal government as a result. By the end of the year, you will have paid a certain amount of taxes. If you paid more than the amount that you actually owed based on your tax bracket, then the government will refund whatever amount is owed back to you in the form of a tax refund.
If you have not paid enough money to cover what you owe for taxes, then what you have is a balance due. This balance due has to be paid by April 15, which is the tax deadline date, or otherwise interest and penalties will be charged by the IRS on whatever amount has not already been paid.
Tax Benefits
You can arrange your financial affairs in order to take advantage of the many tax benefits that are available. You can reduce your tax payments by managing your finances in such a way that your taxes are minimized.
