Taxpayer Definition

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Taxpayer Definition

What Is a Taxpayer?

A taxpayer is any person or corporate organization that owes taxes to the federal, state, or municipal governments. Individual and company taxes are the principal source of income for governments. Individual taxpayers in the United States are normally obliged to submit and pay both federal and state tax returns on an annual basis. Businesses must submit yearly returns as well, although they often prepare for and make recurring anticipated tax payments throughout the year.

Key Takeaways

  • A taxpayer is any person or corporate organization that owes taxes to the federal, state, or municipal governments.
  • Individual and company taxes are the principal source of income for governments.
  • Individuals and corporations have various income tax responsibilities each year.

Understanding Taxpayers

The federal, state, and municipal governments all enact and implement the United States tax law. The Internal Revenue Service (IRS) is the major governmental body in charge of enforcing the income tax legislation for individuals and corporations alike.

Localized taxes, such as sales taxes and property taxes, are implemented and enforced by state and municipal revenue authorities. Individuals and corporations must be aware of their tax duties since failure to pay required taxes may result in fines or further legal action.

Types of Taxpayers


The requirement to pay yearly individual income taxes to the IRS and state revenue agencies is governed by particular criteria. The federal threshold is determined by a person’s filing status. Each state will have its own set of criteria.

Individual taxpayers should review both the federal and state filing thresholds to establish their filing responsibilities for a particular year. Individual taxpayers may get federal tax advice from the Internal Revenue Service’s Publication 501: Dependents, Standard Deduction, and Filing Information.

The amount of tax deducted from a person’s paycheck is determined by their filing status. It is also a major determinant of yearly tax obligations for a particular year. As a result, individual taxpayers must keep the same filing status with their employer that they intend to use for their yearly tax file. Incorrectly notating the tax filing status on employee withholding forms, such as the Form W-4, might result in withholding too much or too little, which must be reconciled at tax time.

  Tax Rate Definition

Marriage and dependents (typically children) are the two factors that will determine a taxpayer’s status. If you are married, you may file either individually or jointly. If a taxpayer’s spouse has died, they may also file as a widower.

Individuals who are not required to submit yearly tax returns will nonetheless be subject to taxes in their daily lives. Aside from income taxes, taxes are enforced on a daily and yearly basis via sales taxes on products and services, as well as property taxes that must be paid separately to local governments. Sales and property taxes differ depending on where you live.

Filing Thresholds

Not everyone in the United States is required to submit a federal tax return as well as a state tax return. The federal filing threshold for a tax return is indicated in the filing status below. Individual states adhere to identical rules but may have different levels.

Some individuals may not be required to submit tax returns at all. Some persons may profit from filing a return even though they are below the thresholds because they may be awarded a refund after deducting and crediting any relevant deductions and credits.

Individual taxpayers must have a social security number in order to submit tax returns. The Social Security Administration may provide you with your social security number. If you want to have tax responsibilities, you must get a social security number, which also serves as a taxpayer identity number.

In general, there is no age limit for paying federal and state taxes. Individuals with gross income at or above the threshold amounts stated below are required to submit a tax return.

Single Taxpayer

A taxpayer is deemed single if, as of the end of the tax year, he or she is unmarried, divorced, a registered domestic partner, or lawfully separated under state law. For tax reasons, the head of a family or a widow do not fall into the “single” group. Single filers have lower income requirements for filing taxes.

  An Overview of Itemized Deductions

Head of Household

Ahead of household is a single or unmarried taxpayer who pays at least half of the expenses of maintaining his or her household and lives with other eligible family members for more than half of the year. This requires the taxpayer to have paid more than half of the total household costs, which include rent or mortgage, utility bills, insurance, property taxes, food, repairs, and other ordinary home expenses. A dependent kid, grandchild, brother, sister, or grandfather are all instances of qualified family members.

Married Filing Jointly

Two taxpayers who marry before the end of the fiscal year may submit their tax returns jointly. Couples who file undermarried filing jointly may report their separate earnings and deductions on the same tax return. A combined tax return will often result in a larger tax refund or a smaller tax obligation.

If just one partner has a considerable income, filing jointly is the best option. If both couples work and their income and itemized deductions are high and uneven, filing separately may be more beneficial.

Married Filing Separately

Married filing separately is a tax status used by married taxpayers who opt to file separate tax returns to report their individual earnings, deductions, and credits. Married filing separately may appeal to couples who discover that pooling their income puts them in a higher tax bracket than if they filed separately. When one spouse has high medical bills, various itemized deductions, or certain applicable credits, filing separately may provide a tax benefit.


This kind of taxpayer is also known as a surviving spouse. After the loss of their spouse, widows and widowers with dependents are eligible for the federal qualifying widow or widower tax filing status for two years.

Individual taxpayers may file their yearly income tax returns as single, head of household, married filing jointly, married filing separately, or widower.

Individual Tax Rates and Standard Deductions

Individual taxpayers who must file an annual federal tax return are subject to the tax rates and standard deductions shown below for 2020, according to their filing status.

  Deadlines for 2022 Estimated Taxes

Individual taxpayers have the following Schedule A standard deductions:

Form 1040

Individual taxpayers with uncomplicated returns may use the existing 1040 tax form to file easily. It takes up half a page and is known as postcard filing. While the front page 1040 has been simplified, many taxpayers will still need to attach applicable papers or schedules based on their unique circumstances.

Self-Employed Business Taxes for Individuals

Self-employed or sole-proprietors may be required to submit a Schedule C along with their 1040. Schedule C is largely an income statement for independent contractors and single entrepreneurs. It includes 1099 earnings. These people may be eligible for some company deductions.

Taxes for Partnerships, Other Small Entities

Partnerships and limited liability corporations (LLCs) are forms of company with many owners. These firms account for a significant proportion of all small enterprises in the United States. Trusts, estates, and qualifying joint ventures are examples of tiny entities that may need to consider yearly income tax filings.

Partnerships and limited liability companies are often taxed as partnerships. Partnerships commonly file Form 1065, an informative return with K-1 reporting that distributes the taxable income or loss to the individual taxpayer owners, for federal taxes. As a result, partners must pay taxes on their K-1 income and submit a 1040 Form, which is then subject to individual 1040 tax rates.

Taxes for Corporations

Throughout the year, corporations normally make frequent anticipated tax payments. These payments are matched up with the yearly tax return. The majority of companies will submit a Form 1120.

Form 1120 is the principal tax filing form for most companies, similar to Form 1040 for individuals. Form 1120, like the 1040, needs attached forms and schedules depending on the condition of the company.

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