Individual Income Tax

Individual income tax is a levy imposed by governments on individuals' financial earnings, including wages, salaries, dividends, interest, and rents. It is typically progressive, meaning higher income levels are taxed at higher rates. Taxpayers must file annual returns, usually by April 15th in the U.S., choosing a filing status that affects their tax rates and eligibility for deductions and credits. Employers often withhold taxes from paychecks, but self-employed individuals may need to make estimated payments. Tax authorities ensure compliance and may conduct audits or impose penalties for underpayment or fraud.