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Income tax in the United States - Wikipedia. Similarly, the United States federal government and most state governments impose an income tax. They 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. Tax Basics: A Beginner's Guide to U.S. Taxes can be confusing.
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