Income Tax
A tax charged as a percentage of the income an individual or household earns, paid to federal and, in most states, state governments.
Often Confused With
- Capital Gains Tax
- Capital gains tax applies to profit on a sold asset; income tax applies to earnings, usually at a higher rate.
- Payroll Taxes
- Income tax funds general government spending; payroll taxes fund specific insurance programs.
Taught In
See Also
5.1.A.1 · 5.1.A.2