Question

In addition to federal income tax, many people also pay corporate tax. state income tax. local medicare tax. local social security tax.

Answer 1

You need to undestand the differents of the meanings for to identify the purpose of each tax.


Federal income tax is a tax on a range of certain kinds of income. Taxpayers generally calculate and pay federal income tax by filing an IRS Form 1040 by April 15 of each year.

A corporate tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities.

Medicare Tax: Tax deducted from the wages of every legally working American that is used to pay for the Medicare program provided to individuals over the age of 65. 

State Income Tax: Tax levied on income at the state level. State income taxes have their own set of deductions and credits that may be awarded for certain activities.

Social Security Tax: A Social Security tax is the tax levied on both employers and employees to fund the Social Security program. Social Security tax is usually collected in the form of payroll tax or self-employment tax.