The income tax system in the United States is pretty straightforward—a certain percentage is applied to your taxable income based on the law. However, it can also be really confusing, especially when you have to deal with both the federal and state collect taxes. In some cases, even the local government imposes income tax on its constituents.
The key difference between federal and state taxes is their tax rates. Depending on their tax law, states may impose income tax from income and dividends but not on their salary and wages, they may apply a flat tax rate, or use a progressive taxing system.
Similarly, federal tax income works the same only that it collects taxes at the federal level and follows a tax bracket that’s spelled out in the US Internal Revenue Code. Furthermore, taxpayers may claim tax deductions to lower their income tax payment.
If you are new to income tax collection, doing it on your own can be confusing. Any tax accounting firms in Texas can help you navigate in the world of the IRS and tax collection system.
Call KF Tax & Accounting, P.C. for your accounting and bookkeeping services needs. We are here to help Texans maximize your deductions and educate you about taxation as well. We will ensure that you can avail of the tax deductions, refunds, and/or exemptions that you deserve.