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FEDERAL AND STATE TAXES

The United States has a multi-tiered income tax system under which taxes are imposed by federal, state, and sometimes local governments. Federal and state income taxes are similar in that they apply a percentage rate to taxable incomes, but they can differ considerably with respect to those rates and how they're applied, as well as to the type of income that is taxable and the deductions and tax credits that are allowed.

We handle everything from federal income taxes, excise taxes, state income taxes, sales taxes, payroll and unemployment taxes and more.

Federal Income Taxes

Income taxes in the United States are imposed by the federal, most states, and many local governments. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. 

Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships are not taxed, but their partners are taxed on their shares of partnership income. 

Residents and citizens are taxed on worldwide income, while nonresidents are taxed only on income within the jurisdiction. Several types of credits reduce tax, and some types of credits may exceed tax before credits. An alternative tax applies at the federal and some state levels.

State Income Taxes

Most individual U.S. states collect a state income tax in addition to federal income tax. The two are separate entities. 

Some local governments also impose an income tax, often based on state income tax calculations. Forty-two states and many localities in the United States impose an income tax on individuals. 

Eight states impose no state income tax, and a ninth, New Hampshire, imposes an individual income tax on dividends and interest income but not other forms of income. Forty-seven states and many localities impose a tax on the income of corporations