Editing Taxation in the United States (section)

===Income===
{{Main|Gross income|Tax exemption#Exempt income}}
[[File:US Share of Income Taxes Paid by Income Level v1.png|thumb|upright=1.6|Share of income tax paid by level of income. The top 2.7% of taxpayers (those with income over $250,000) paid 51.6% of the federal income taxes in 2014.<ref name=Pew_1>{{cite web|url=http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/|title=High-income Americans pay most income taxes, but enough to be 'fair'?|website=Pew Center|date=April 13, 2016 |access-date=November 30, 2016}}</ref>]]

Taxable income is [[gross income]]<ref>{{USC|26|61}}; IRS Publication 17, Part II.</ref> less adjustments and allowable [[tax deduction]]s.<ref>{{USC|26|161|249}}; IRS Publication 17, [https://www.irs.gov/publications/p501/index.html Publication 501] and [https://www.irs.gov/publications/p535/index.html Publication 535].</ref> Gross income for federal and most states is receipts and gains from all sources less [[cost of goods sold]]. Gross income includes "all income from whatever source", and is not limited to cash received.  Income from illegal activities is taxable and must be reported to the [[Internal Revenue Service|IRS]].<ref>{{ussc|name=James v. United States|link=James v. United States (1961)|volume=366|page=213|pin=|year=1961}}</ref>

The amount of income recognized is generally the value received or which the taxpayer has a right to receive. Certain types of income are specifically excluded from gross income. The time at which gross income becomes taxable is determined under federal tax rules. This may differ in some cases from accounting rules.<ref>{{USC|26|446|475}}; IRS [ Publication ].</ref>

Certain types of income are excluded from gross income (and therefore subject to [[tax exemption]]).<ref>{{USC|26|101|140}}.</ref> The exclusions differ at federal and state levels. For federal income tax, interest income on state and local bonds is exempt, while few states exempt any interest income except from municipalities within that state. In addition, certain types of receipts, such as gifts and inheritances, and certain types of benefits, such as employer-provided health insurance, are excluded from income.

Foreign non-resident persons are taxed only on income from U.S. sources or from a U.S. business. Tax on foreign non-resident persons on non-business income is at 30% of the gross income, but reduced under many [[tax treaty|tax treaties]].

[[File:Irs_taxable_income.jpg|frameless|upright=3.45]]

[[File:income tax '17-'18.jpg|frameless|upright=3.45]]

These brackets are the taxable income plus the standard deduction for a joint return. That deduction is the first bracket. For example, a couple earning $88,600 by September owes $10,453; $1,865 for 10% of the income from $12,700 to $31,500, plus $8,588 for 15% of the income from $31,500 to $88,600. Now, for every $100 they earn, $25 is taxed until they reach the next bracket.

After making $400 more; going down to the 89,000 row the tax is $100 more. The next column is the tax divided by 89,000. The new law is the next column. This tax equals 10% of their income from $24,000 to $43,050 plus 12% from $43,050 to $89,000. The singles' sets of markers can be set up quickly. The brackets with its tax are cut in half.

Itemizers can figure the tax without moving the scale by taking the difference off the top. The couple above, having receipts for $22,700 in deductions, means that the last $10,000 of their income is tax free. After seven years the papers can be destroyed; if unchallenged.

'''Source and Method'''<ref>{{cite web| url = https://www.irs.gov/pub/irs-pdf/i1040gi.pdf| title = "IRS 1040 '17" p. 104"}}</ref><ref>[https://www.documentcloud.org/documents/4330092-Tax-Cuts-and-Jobs-Act-2017.html "Tax Cut and Jobs Act"].</ref>