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I don't have a well defined idea on how the tax system works in the US, the few things I know is that they are paid to the IRS every amount of time (yearly probably) that there's an interest/additional fine after retarding a payment and there's a difference between active and passive income (e.g salary or bank interests, but I know whether there's a distinction in terms of percentage imposing). How does it work for a normal working layman that is, for example, an employee? How often should he pay the IRS? Does he have to pay each month a portion of his salary in taxes or does he have to gather the money on a yearly basis in order to have the fixed percentage of his annual reported salary (which is the sum of the 12 monthly salaries)?

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For convenience, you can have your employer withhold taxes from each pay check. You can also send money to the IRS quarterly.

The IRS prefers a steady predictable revenue stream and will fine you if you underestimated your income and make a balloon payment for the fourth quarter, even if the total amount you send them over the course of the year doesn't change.

State taxes work the same way. State taxes are deductible from Federal taxes, to an extent.

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  • Thank you for the answer, however I don't have things wholly clear in my mind, I thought that there was no distinction between federal and state taxes, I though they were all packed – abdul Feb 17 at 18:07
  • Not all states have income taxes but they are separate from federal taxes. There are also local taxes based on county, school district, hospital district, and other boundaries which are typically property or sales tax. When doing your taxes this year, remember that the revolution was fought over a 3% sales tax on certain items. – Clint Eastwood Feb 17 at 18:12
  • I'm not from the US to begin with, nor have I ever stepped foot in it, that's why I'm asking. – abdul Feb 17 at 18:13
  • So basically if I decide to pay taxes once an year, but then at the end of the tax year I don't have enough money to meet up the percentage of my annual income (because I spend a lot), then I risk to get penalties, don't I? – abdul Feb 17 at 18:49
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    An employee normally means a w2 employee, and i believe employers are required to withhold tax every paycheck, not just done for convenience. If your not an employee and get a 1099, you're then required to pay taxes quarterly at least, i believe. – Andy Feb 17 at 23:35

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