Introduction to the U.S. Tax System
Understanding the U.S. Tax System
The United States tax system is a multi-level system in which taxes are imposed by the federal government, state governments, and local governments. Each level has its own taxing authority, laws, tax rates, and administrative agencies. CPA candidates primarily study federal taxation, but understanding the relationship between all levels of government is essential.
- Federal taxes apply throughout the United States.
- State taxes vary from state to state.
- Local governments may impose additional taxes.
- Different authorities administer different taxes.
Note
The CPA Tax Compliance & Planning section focuses mainly on federal tax law administered by the Internal Revenue Service (IRS).
Summary
The U.S. tax system consists of multiple taxing jurisdictions, with federal taxation serving as the foundation of CPA tax studies.