Question

What are the different types of tax? Where do they fall in the taxation process.

Answer 1

A business may be required to remit the following taxes:

Federal Income Tax: It is a tax levied by national government on annual income earned by an individual.

State/ Local Income tax : It is tax levied by local government and every state is not entitled to levy such taxes.

Unemployment tax: Unemployment assistance to laid off workers is funded through allocation of unemployemnt tax to unemployment agencies.

Payroll Tax: The tax withheld by employer and paid to government on behalf of employee is called payroll tax.

Sales Tax: Tax imposed on sale of goods or rendering of services.

Foreign tax: Tax paid to foreign government on income earned in that country.