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IRS/Tax

Federal IRS/Tax Laws are essential, but so are State Tax Laws.

State tax returns are as crucial as Federal Tax returns are, and filed around the same time as the Federal Taxes.

Although several state tax codes are the same as Federal tax codes, there are usually some key differences between the laws in the different states, which is essential to take note of, before the tax process begins.   

Congress must write the Internal Revenue Code (IRC), which is also known as the Tax Code, which is involved in directing the process of collecting taxes, enforcing tax rules, and issuing tax refunds.

The Internal Revenue Service (IRS) refers to the government agency within the Department of Treasury of the United States that implements the following functions.

They make use of revenue rulings, procedures, and letter rulings in offering guidance.

They interpret the tax laws through their edicts and regulations, which guide the application of tax laws.  

However, the federal courts own the final say concerning how to interpret the tax code, regardless of what the IRS explains it to be.

The taxes collected from individuals and companies based on their income, sales, real estate, and payroll are usually distributed by the Federal Government, according to the budget of the country.

These taxes are then used to finance programs such as Education, Welfare services, National defense, Social security, and so on.

Types of Tax Incomes

There are two types of Income: Earned and Unearned Income.

Earned Income refers to wages, tips, commissions, sick pay, bonuses, unemployment benefits as well as other no cash benefits,

while Unearned income depicts incomes such as interest, business, and farm income, rents, alimony, winnings from gambling, assets, profit from sales, and so on.