Income tax
Income Tax
Income tax (/ˈɪnkʌm tæks/) is a type of tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.
Etymology
The term "income tax" comes from the English words "income" and "tax". "Income" is derived from the Latin word "incomen", meaning "come in", and "tax" is derived from the Latin word "taxare", meaning "to assess".
Types of Income Tax
There are several types of income tax, including:
- Personal Income Tax: This is a tax on an individual's income. The amount of tax is based on the individual's total income and their tax bracket.
- Corporate Income Tax: This is a tax on the profits of corporations. The tax is calculated on the net income of the corporation.
- Capital Gains Tax: This is a tax on the profit made from the sale of an asset. The tax is calculated on the difference between the sale price and the purchase price of the asset.
- Payroll Tax: This is a tax that employers withhold from employees' wages and pay directly to the government.
Related Terms
- Tax Bracket: This is the range of income that is taxed at a certain rate. There are typically several tax brackets in a tax system, with higher income earners paying a higher rate of tax.
- Tax Deduction: This is an expense that can be subtracted from a taxpayer's income before the income is subject to taxation.
- Tax Credit: This is an amount of money that a taxpayer can subtract from the amount of tax they owe to the government.
- Tax Return: This is a form that a taxpayer submits to the government that details their income, deductions, and credits for the year.
- Tax Refund: This is a payment from the government to a taxpayer when the taxpayer has paid more tax than they owe.
External links
- Medical encyclopedia article on Income tax
- Wikipedia's article - Income tax
This WikiMD dictionary article is a stub. You can help make it a full article.
Languages: - East Asian
中文,
日本,
한국어,
South Asian
हिन्दी,
Urdu,
বাংলা,
తెలుగు,
தமிழ்,
ಕನ್ನಡ,
Southeast Asian
Indonesian,
Vietnamese,
Thai,
မြန်မာဘာသာ,
European
español,
Deutsch,
français,
русский,
português do Brasil,
Italian,
polski