Answer: Taxes are compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.
Explanation: Taxes are mandatory contributions collected by governments.
The Internal Revenue Service (IRS) collects federal income taxes in the United States.
There are many forms of taxes and most are applied as a percentage of a monetary exchange (for example, when income is earned or a sales transaction is completed).
Other forms of taxes, such as property taxes, are applied based on the assessed value of a held asset.
Understanding what triggers a tax situation can enable taxpayers to manage their finances to minimize the impact of taxes.
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