The tax system in the United States is considered to be one of the most advanced tax systems in the world. The United States is a liberal economy oriented country and it is a federal state. It uses a three-tier tax system: federal taxes, state taxes, and local taxes. In this article we will talk about some of the features of the U.S. tax system that you need to know. This information will be useful for every U.S. citizen who is a taxpayer.
The tax administration authority in the United States is the Internal Revenue Service (the IRS), which is the largest structural unit of the U.S. Treasury Department. There are so many subtleties in the submission of taxes that there is a special profession of “tax consultant” who understand all the points and subtleties of thousands and thousands of rules and special cases. Many enterprises use the services of specialized companies. They can be useful in the preparation of tax returns and in many other situations. Here is an example of a good company that can help with tax preparation tucson https://southwesttaxassociates.com/.This company has a lot of specialists who can help with different questions regarding taxes.
The specificity of the composition and structure of the U.S. tax system is determined by the scale of use of all types of direct taxation. In the U.S. taxation system, the main types of taxes on all levels of power are used in parallel. Thus, the residents pay 3 income taxes, 3 corporate income taxes, 2 property taxes, etc.
The main part of the federal budget revenues is income tax, the subjects of which are individuals, individual enterprises and partnerships that do not have the status of a legal entity.
The calculation is performed in 3 stages:
- Gross income may consist of salary, annuity, pension, alimony, income on securities, remuneration, bonuses, rent and royalties, farm income, social allowance and unemployment benefit, scholarship, income from trust operations and real estate, etc.
- Gross income is adjusted by deducting allowed costs and benefits from it. They include trade or production costs, losses from the sale or exchange of securities, pension contributions from individuals, alimony payments, advance tax payments, etc.
- Classified or standard deductions are excluded from adjusted gross income. The resulting amount is taxable income. The main deductions include: a non-taxable minimum for each taxpayer’s dependant; standard discounts, additional discounts for persons over 65 years of age and disabled persons; costs of moving to a new place of residence related to professional development; travel expenses, charitable contributions, etc. These deductions may not exceed 50% of adjusted gross income, and the remaining 25% may be deducted from income within 5 years.
Another important tax in the income taxation system is corporation income tax. The main principle of corporate taxation in the U.S. is the collection of tax on net income as the final object of taxation. Payers of this tax are, first of all, joint-stock companies. Approximately 85% of the tax is levied at the federal level and 15% at the state and local levels.