Income Tax

Definition - What does Income Tax mean?

Income tax refers to a tax which is applicable on almost everyone earning above a certain amount. The income tax is applied on net income which is the figure after the deductions of expenses like charitable gifts, etc. The amount of tax is calculated using a specific formula which takes into account the fact whether the payer is single or married, the number of dependants, etc.

Justipedia explains Income Tax

Income tax was authorized and has been in effect since 1913 right after the 16th Amendment. Many states also calculate income tax, but the rate is considerably lower than the federal income tax. The main aim behind collecting income tax is to facilitate the poeple.

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