<P> Taxes are imposed on net income of individuals and corporations by the federal , most state , and some local governments . Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes . Income subject to tax is determined under tax accounting rules , not financial accounting principles , and includes almost all income from whatever source . Most business expenses reduce taxable income , though limits apply to a few expenses . Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses , including home mortgage interest , state and local taxes , charitable contributions , and medical and certain other expenses incurred above certain percentages of income . State rules for determining taxable income often differ from federal rules . Federal tax rates vary from 10 % to 39.6 % of taxable income . State and local tax rates vary widely by jurisdiction , from 0 % to 13.30 % of income , and many are graduated . State taxes are generally treated as a deductible expense for federal tax computation . In 2013 , the top marginal income tax rate for a high - income California resident would be 52.9 % . </P>
<P> Taxes are imposed on net income of individuals and corporations by the federal , most state , and some local governments . Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes . Income subject to tax is determined under tax accounting rules , not financial accounting principles , and includes almost all income from whatever source . Most business expenses reduce taxable income , though limits apply to a few expenses . Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses , including home mortgage interest , state and local taxes , charitable contributions , and medical and certain other expenses incurred above certain percentages of income . State rules for determining taxable income often differ from federal rules . Federal tax rates vary from 10 % to 39.6 % of taxable income . State and local tax rates vary widely by jurisdiction , from 0 % to 13.30 % of income , and many are graduated . State taxes are generally treated as a deductible expense for federal tax computation . In 2013 , the top marginal income tax rate for a high - income California resident would be 52.9 % . </P>
who has to pay taxes in the united states
who has to pay taxes in the united states
individuals and corporations
individuals and corporations