In the United States there are many forms of taxes that taxpayers must pay, such as income tax, value added tax (VAT) and sales tax. In addition, each state has its own tax law to apply. The federal tax system is based on the federal Income Tax Act (IRS), which is the guide for the federal tax regime. Taxpayers are responsible for filing a tax return and paying all taxes due.
Taxpayers must also pay other types of taxes, such as fuel, estate and inheritance taxes. Taxpayers are entitled to various exemptions and even tax credits. Taxpayers can get help understanding their tax obligations at the IRS website and contact the State Tax Department with specific questions or requests related to return preparation.
Federal Income Tax
U.S. taxpayers must file a Federal Income Tax Return to calculate the federal income tax due. The IRS collects federal taxes to fund the federal government. The amount of tax varies depending on income and savings. Taxpayers are eligible for some allowances, such as the earned income credit, to reduce their tax liability.
State Taxes
State Taxes: State taxes are taxes levied by state authorities. These taxes may include property, income, excise, fuel and sales taxes. These taxes are levied to fund projects, infrastructure and services for the benefit of the community.
Benefits of State Taxes: State taxes can be beneficial to the people and to local government. Revenues generated from these taxes are used to fund projects such as schools, roads, hospitals, and social assistance programs. In addition, state taxes help maintain a healthy economy.
Goods and Services Tax
Goods and Services Tax (VAT): Value Added Tax (VAT) is a tax levied on the sale of goods and services. It applies in all European Union countries and is levied on both buyers and sellers. VAT in Spain is charged at 21%, but may vary depending on the quantity and type of products sold.
Wealth Tax: Wealth tax is an annual tax levied on the net income from personal assets. It is levied in Spain every year from January 1 to December 31. The rate varies depending on the taxpayer's net worth.
Corporate income tax: Corporate Income Tax is a direct tax levied on the profitability obtained by companies, and therefore has an impact on the income obtained during the fiscal year. This tax is applied in Spain at a general rate of 25% for all entities, regardless of their size or activity.
Real Estate Property Tax
The Real Estate Property Tax is a tax payable annually on real estate property, such as houses, buildings and land. It is the most important tax for the municipality or city where the property owner resides because it raises money for municipal programs and services. The amount of the tax is based on the value of the property and varies from state to state.
Value-Added Tax (VAT)
Value Added Tax (VAT): VAT is a tax levied on goods and services. It applies to most goods and services produced in the country, as well as to imports. Value Added Tax is generally an indirect tax, so it is not included directly in the price of the product. It is designed to seek a broader revenue base, to help the government raise the amount needed to finance public projects.
Taxpayers can be businesses or individuals purchasing goods or services. VAT is calculated by multiplying the price of the goods or services by the prevailing rate. The buyer then pays the amount of the tax to the seller, who in turn is obliged to reimburse it to the relevant government. The VAT rate varies from country to country, however, it is generally in the range of 10% to 25%.
