Income Tax is the most dreadful thing any American can do on this planet. Each year every American in the month of April gets prepared to file their taxes with the tax authorities. Income Tax first stated off in the year 1798 in Britain by William Pitt the younger. The reason to start off this tax scheme was to pay for military hardware and gear for the Napoleonic Wars. The government of Britain needed about ten million pounds but when they came to realize their profits they had realized that they had made just over six million pounds. The tax at that time had six different categories that would decide who would be taxed what. If in the event someone did not fall under any of the categories than that person would have not been taxed.
The power to collect and the limitations that the law imposes is written in Article 1 section 8 of the American constitution. The law states that the congress has the right to collect Taxes, Duties, Imposts and exercises that it may deem necessary. It is further stated that all the taxes levied on the people should be uniformed.
In the year 1913 the government made it necessary to make payments to finance the war efforts. The necessity was outlined in the 16th Amendment it read as "The Congress shall have authority to lay and receive taxes on incomes, from whatever source derived, without distribution among the several states, and without regard to any census or enumeration." The system that was used back then is still used today. The government also imposed withholding tax. This tax is also known as the pay as you go taxes. This was necessary to avoid irregularities in the tax system. The taxes were taken from the source that means as soon as you earned your money it was deducted at source.
When you file your income tax with the relevant authorities you will have to go through a certain procedure. We will briefly explain you of this procedure and how your tax is calculated.
Your income tax is dependant on how much you make in a year. The sum of that amount is dependant on the amount that is set by the government. When you start a job you will have to fill a tax form that will be maintained with the tax authorities. The people in the accounts will know how and when your tax will be deducted. Once you have earned a certain amount of income your salary will be measured with the scale. The tax of most individual is cut at source this is you wont have to bother about how and when your taxes will be cut. For some individuals though taxes have to be cut at the normal way. That is file them with the normal filing of subsequent bills so that they can be verified with the tax authorities.
