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This category covers how a person's income taxes are calculated and paid, to the federal and state government, based on money that they have made from wages, independent contractor work, royalties, interest, and other sources. It also covers what deductions and benefits might reduce the taxes owed.
Federal tax benefits are incentives offered by the U.S. government to reduce taxpayers' tax burden and to encourage certain activities. These benefits include tax credits, deductions, exemptions, and exclusions such as tax-free or tax-deferred accounts.
Income taxes are a type of tax imposed by governments on individuals based on their income. There are federal income taxes and state income taxes. In general, a portion of an individual's income is taxable at the federal level, while the remainder is taxable at the state level.