Get the basics about income tax law and more
Federal tax law isn't exactly common knowledge to most taxpayers, given that there are so many types of tax laws out there and each one can change based on your situation. Still, it can be important to understand as much as you can about them, whether you're dealing with basic income tax law or more complicated matters such as real estate or inheritance tax law, in order to protect yourself and to stay out of tax trouble.
Common Tax Laws
While it wouldn't be practical to name every tax law in existence, the most common ones individuals encounter include:
- Income tax law. This is the most basic tax law, since anyone with an income must pay income tax. Income tax laws simply state that you must pay a sum of money in tax to the federal government based on your level of income. Obviously, the laws will vary based on your level of income, and may even exempt you from paying.
- Inheritance tax law. Inheritance tax law stipulates that a tax must be paid on the estate or value of all money and property owned by a deceased individual. Typically, the tax is paid by the beneficiaries of the estate or property, though in some cases it may fall to the representatives of the estate to pay.
- Real estate tax law. Real estate tax law (also known as property tax law) requires landowners or owners of real estate or real property to pay a tax based on the value of their property. In some states, real estate law allows you to split your taxes into two parts; one based on the value of the land in question, and another on the structure on the land.
- Small business tax law. Small business owners have a slightly different type of tax law than larger businesses, but are often given more tax incentives and credits as well. Many aspects of small business tax law are designed to help small business owners keep their businesses afloat and to manage any debt that may be incurred.
Learning More about Tax Laws
The definitions listed above are generalizations only – keep in mind that tax laws vary from state to state and may change based on your individual situation. If you want to learn more about tax law, researching online or consulting tax lawyers and tax professionals about your specific tax needs is advisable.