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Pasadena Texas online Form 1040-NR-EZ: What You Should Know
The IRS publishes the latest data on worldwide tax treaty and tax treaties for all foreign nations. Please follow our link to International student information: What is an Income Tax? A “tax” is a tax imposed upon a person or class of persons by governments and other governmental structures. The Internal Revenue Code defines a tax as a payment due from a taxpayer to the government or to an agency of the government. The IRS will assess, collect, and distribute a tax under the following two tax categories: The First Tax Category The first category of tax includes payments, interest, dividends, and other compensation. Payments for goods or services performed by the taxpayer are also subject to this category of tax. This category does not include: The Second Tax Category The second tax category of tax includes: (1) Federal income taxes (including Social Security and Medicare taxes); and (2) Federal excise taxes. This tax does not include: The Third Tax Category The third tax category of tax includes: (1) State income taxes; (2) State excise taxes; and (3) Local income taxes. The Federal government, state governments, and local governments impose income taxes. Income taxes are only considered the first and second tax categories. However, the third tax category is considered the most significant because it includes many payments by individuals not subject to other federal tax obligations—for example, child support from parents, Social Security payments and Medicare premiums, and state and local income taxes. A payment is defined as an actual financial transfer made by one person to another who does not receive the full value of the payment in return. A transfer includes cash advances, deposits, insurance proceeds, and other payments of value. The payment itself must not cause any tax liability for the recipient. For example, the payment will not be considered a transfer as long as the payment would not have imposed a financial transfer tax liability even if made. Thus, the payment of money to a non-resident alien cannot qualify as a payment subject to income tax. The payments described in this category are subject to federal income tax at the applicable rates, if any.
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