Income tax is a calculation based on someone’s earnings. It’s a levy imposed on individuals, business or other entities like trusts or estates based on their income or profits. Government use income tax revenues to finance public services and infrastructure including health care, transportation, education, defense and social welfare programs. The tax rates vary upon ones earning which is done my thyself in that particular year. Tax payers typically report and calculate their tax liability annually within the time proposed by the government. Failure to comply with tax laws may include penalties, fines or any other legal action.