How does income tax work?



In the United States, how does tax work when you have job? And how do you pay it? Do they just take money out from your salary?

How does income tax work?
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2 Replies to “How does income tax work?”

  1. They withhold an estimated amount out of your wage or salary. At the end of the year you file a tax return. You report your income, subtract certain deductions, and a personal exemption exclusion based on the number of people in your family. This results in your taxable income. From this you go to a tax table which will tell you your tax liability. This is compared with the amount withheld from your wage or salary. Usually you will get a small tax refund, but sometimes you may owe more money.


  2. yes, if you complete a W-4 and a I 9 for your employer, you will have 7.65% withheld for FICA, maybe 1% or more for state disability
    the amount of income tax withheld will depend on how you complete the W-4, your status, how many jobs you have and how many dependents etc.
    when you get paid, you demand a pay stub so you can see what they are withholding from your paycheck





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