A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity. Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government a payment exacted by legislative authority."  A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other names.

Taxation in the United Statesis a complex system which may involve payment to at least four different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and county governments. It also includes regional entities such as school and utility, and transit districts as well as including state and federal government.

The U.S. tax code is known as the Internal Revenue Code of 1986 (title 26 of the United States Code). The Code's complexity generally arises from two factors: the use of the tax code for purposes other than raising revenue, and the feedback process of amending the code.  While its main intent is to provide revenue for the federal government, the tax code is frequently used for public policy reasons i.e., to achieve social, economic, and political goals. For example, the tax law provides a deduction for mortgage interest on primary residences in order to encourage home ownership. In addition, it does not allow a deduction for renters for rent paid to offset the extra advantage of nonrecognition of exclusion of imputed owner occupied rent.  As of June 2001, the income tax forms the bulk of taxes collected by the U.S. government. Depending on individual income, the tax ranges from zero to 35% of one's taxable income.

The income tax is called a progressive tax because it is higher as a percentage of the income of higher-income individuals. For an example showing the tax rates imposed by Congress in 1954 on the taxable income of unmarried individuals with rates as high as 91%.  The tax is also imposed on the taxable income of most corporations. This results in double-taxation of the dividends paid to stockholders, although individuals usually pay a preferential tax rate on dividends.

One fairly unique aspect of federal income tax in the United States, is that the U.S. uses citizenship in addition to residency in determining whether a person's income is subject to U.S. taxation. All U.S. citizens, including those who do not live in the United States, are subject to U.S. income tax on their worldwide income. There are provisions that exist to reduce double-taxation. Most other countries do not impose tax on their citizens who are not resident within their borders, unless they have income which is sourced in that country (and even then they only tax that specific income).

Each taxpayer (business or individual) must figure taxable income on an annual accounting period called a tax year. The calendar year is the most common tax year. Other tax years are a fiscal year and a short tax year.

Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it, regardless of when payment is received, and deduct expenses in the tax year you incur them, regardless of when payment is made.  For a complete discussion refer to the Internal Revenue Service Publication 538, Accounting Periods and Methods.