Taxes Definition

A tax is an involuntary fee imposed on businesses or individuals that is enforced by a government entity to finance government activities.

Taxes Extended Definition

Businesses and individuals are responsible for paying taxes to the federal government, along with state and local governments.

There are several types of taxes to know about in business, including:

  • Income taxes
  • Sales tax
  • Payroll taxes
  • Corporate tax

Employers must withhold payroll taxes from each employee’s wages and remit them to the proper government agencies. These taxes includes federal income, Social Security, Medicare, and state and local income taxes.

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