Search Investopedia

Federal Income Tax

Filed Under » ,
Dictionary Says

Definition of 'Federal Income Tax'

A tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts and other legal entities. Federal income taxes are applied on all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains. 
Investopedia Says

Investopedia explains 'Federal Income Tax'

It is important to distinguish between the general notion of income tax and federal income tax. In the United States, governments at the state level may also levy income taxes in addition to federal income taxes. Not all states have implemented state level income taxes. For example, the states of Texas and Florida are just two of the handful of states in which federal income taxes are the only income taxes that are levied.

Video Definition

Related Definitions

  •

    Profits Interest

    A monetary right awarded to the general partner, investment manager or a service provider of a partnership. The award consists of receiving a percentage of profits from a partnership ...
    Read More »

  • Tax Rate

    1. The rate at which a business or person is taxed on income. 2. The rate of tax on good and services.
    Read More »

  • Federal Unemployment Tax Act - FUTA

    The original legislation that allows the federal government to tax businesses with employees for the purpose of collecting revenue that is then allocated to state unemployment agencies ...
    Read More »

    • Tax Liability

      The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event. Tax liability can be calculated by applying the ...
      Read More »

    • Tax Schedule

      A rate sheet used by individual taxpayers to determine their estimated taxes due. There are four main schedules used, based on the filing status of the individual:Schedule X - ...
      Read More »

    • Tax Table

      A table or chart displaying the amount of tax due based on income received. The tax rate may be shown as a discrete amount, a percentage rate, or a combination of both. Tax tables are ...
      Read More »

    • Federal Tax Brackets

      Income tax groupings specified by the Internal Revenue Service (IRS) that determine at what rate an individual, trust, or corporation's annual income will be subject to federal income ...
      Read More »

    • After-Tax Return

      The return on an investment including all income received and capital gains, calculated by taking expected or paid income taxes into account. Generally reserved for returns on positions ...
      Read More »

    • Taxation Without Representation

      A situation in which a government imposes taxes on a particular group of its citizens, despite the citizens not consenting or having an actual representative deliver their views when the ...
      Read More »

    • Tax Planning

      Logical analysis of a financial situation or plan from a tax perspective, to align financial goals with tax efficiency planning. The purpose of tax planning is to discover how to ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions