Individual Income Taxes Urban Institute

Income Taxes

A handful of jurisdictions tax residents only on income earned in or remitted to the jurisdiction. There may arise a situation where the tax payer has to pay tax in one jurisdiction he or she is tax resident and also pay tax to other country where he or she is non-resident. This creates the situation of Double taxation which needs assessment of Double Taxation Avoidance Agreement entered by the jurisdictions where the tax payer is assessed as resident and non-resident for the same transaction. Separate taxes are assessed against each taxpayer meeting certain minimum criteria. Many systems allow married individuals to request joint assessment. Many systems allow controlled groups of locally organized corporations to be jointly assessed. In 1913, the Sixteenth Amendment to the United States Constitution made the income tax a permanent fixture in the U.S. tax system.

This page contains important information on the time limitations for claiming a refund and on the calculation of interest. Personal income tax exemptions directly reduce how much tax you owe. Exemptions are generally related to your filing status and number of dependents you report on your tax return, but not always. If you’re a nonresident with an annual Massachusetts gross income of more than either $8,000 or the prorated personal exemption, whichever is less, you must file a Massachusetts tax return. Public disclosure of personal income tax filings occurs in Finland, Norway and Sweden (as of the late-2000s and early 2010s). In Sweden this information have been published in the annual directory Taxeringskalendern since 1905. Countries do not necessarily use the same system of taxation for individuals and corporations.

Threshold income

Have your Social Security number, filing status, and the exact whole dollar amount of your refund ready. We cannot guarantee the accuracy of this translation and shall not be liable for any inaccurate information or changes in the page layout resulting from the translation application tool. For more information about taxation of benefits, read our Retirement Benefits booklet or IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. More than $44,000, up to 85 percent of your benefits may be taxable. More than $34,000, up to 85 percent of your benefits may be taxable.

Income Taxes

The percent of your income that is taxed depends on how much you earn and your filing status. The term “income tax” refers to a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. By law, taxpayers must file an income tax return annually to determine their tax obligations. Maine generally imposes an income tax on all individuals that have Maine-source income. The income tax rates are graduated, with rates ranging from 5.8% to 7.15% for tax years beginning after 2015. The rates ranged from 0% to 7.95% for tax years beginning after December 31, 2012 but before January 1, 2016.

for Calculating Income

You must claim your refund or credit within a certain time period, as further detailed below. Also, the Department of Revenue must issue refunds within a certain time period or pay interest on the amount of the refund.

  • The graduated rates of tax apply to capital gains from assets held for 12 months or less.
  • If the value of an owner-occupied dwelling would be positive it is changed to zero.
  • The legislative body of the town sets a tax rate to raise money for highways and town expenses.
  • More than $34,000, up to 85 percent of your benefits may be taxable.
  • Most jurisdictions base residence of entities on either place of organization or place of management and control.

Different estimation choices illustrate the estimate’s sensitivity. For example, varying the analytic assumptions underlying one of our key methodological choices causes the estimate to vary from 6 to 12 percent. A common reference point for Income Taxes defining income in economics is known as Haig-Simons income. Pre-tax Haig-Simons income equals families’ change in wealth, plus taxes and consumption. We define our income measure as families’ change in wealth plus easily estimable taxes.

State, provincial, and local

Switzerland and U.S. states generally impose such tax only on corporations and base it on capital or a similar measure. While tax rules vary widely, there are certain basic principles common to most income tax systems. Tax systems in Canada, China, Germany, Singapore, the United Kingdom, and the United States, among others, follow most of the principles outlined below. Some tax systems, such as India, may have significant differences from the principles outlined below. Most references below are examples; see specific articles by jurisdiction (e.g., Income tax in Australia). In the United Kingdom of Great Britain and Ireland, income tax was reintroduced by Sir Robert Peel by the Income Tax Act 1842. Peel, as a Conservative, had opposed income tax in the 1841 general election, but a growing budget deficit required a new source of funds.

  • The income of a corporation’s shareholders usually includes distributions of profits from the corporation.
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  • Any differences created in the translation are not binding on the FTB and have no legal effect for compliance or enforcement purposes.
  • An income tax is a tax imposed on individuals or entities in respect of the income or profits earned by them .
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