As in other countries, the United States also imposes tax on taxable income. This may be the taxabale inome of individuals, companies, partnerships, trusts, etc. And these are governed by income laws to ensure that the imposition of taxes are fair and regulated.
The federal income law is imposed primarily by the Internal Revenue Service. This is mainly concerned with generating revenue for the government. The IRS has many IRA Annuity
plans to suit anyone's needs. This law is used for public and social policy reasons.
Earned income law deals mainly with taxes imposed on the earned income of an individual. By definition, earned income are wages or salaries of an individual, net earnings from self-employment, or a minority of disability payments. As such, the government came up with the earned income tax credit, a refundable tax credit for low-income workers. This helps them a lot in terms of lessening the burden brought on by taxes.
The taxable income law deals with taxes imposed on the taxable income of and individual. Taxable income is the income against which tax rates are applied to compute tax paid. Whereas earned income is the net income, taxable income is the gross income less deductions and expenses.
There are other types of income laws applied. We have the bankruptcy income law, disability income law, retirement income law, IRS extension
law and more. These laws are imposed not only to provide revenue to the government but to protect the citizens as well.
So how do income laws protect the citizens These laws are designed to curtail excessive taxation on their income. They provide a just and reasonable matrix of how much tax will be imposed per income bracket. In doing this, citizens are asured that they are not being cheated out of their hard-earned money.
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