The United States implements a voluntary tax system. Americans with income sources, whether from salary or investment, must fill in the 1040 form every year, truthfully declare their income in that year to the IRS, and calculate the annual tax payable according to the tax laws enacted by Congress and the President. The interest on home loan is very high. In order to encourage people to buy houses, the government reduces the loan interest of buyers when filing tax returns. When people apply for school loans or buy energy-efficient cars, they can apply for interest reduction when filing tax returns. If you are engaged in low-income jobs or pay medical expenses, you can also apply for tax relief.
19 13, the United States passed the amendment to Article 16 of the Constitution, allowing Congress to evaluate people's income tax. In the 1940s, Congress enacted a law requiring enterprises to withhold the estimated income tax from the wages of their employees. When a person is employed, he must fill out the W-4 form and tell the employer how much tax should be withheld. Employers also send W-2 forms to employees and the IRS to inform employees of their income and withholding tax for the current year. The IRS uses the W-2 form to ensure that taxpayers file their taxes correctly. Last year, 74% of taxpayers received the tax refund from the IRS. The income tax rate in the United States reached 77% at its peak and is currently 35%. At present, the proportion of Americans paying taxes online has risen to 58%.
The American tax system depends on people's honesty to some extent. All Americans, whether working at home or abroad, must pay taxes. The IRS verifies their tax payment through various channels. If someone intentionally evades taxes, it may lead to the IRS asking him to pay a lot of interest and fines. If someone intentionally misleads the IRS, they may be brought to justice. 85% of taxpayers in the United States pay taxes, which is a considerable number. Most Americans pay taxes according to regulations, and a small number of Americans pay taxes through compulsory law enforcement. According to the estimation of the IRS, some American companies and individuals who invest overseas often underreport their overseas income by half, and the United States loses about $350 billion in fiscal revenue every year because of tax evasion.