I want to know more about income tax of USA...?

Being a student of finance, I am curious about the tax structure of a federal government. ( I am bangladeshi and as my country has no federal govt, the citizens only pay tax to the NBR or national board of revenue once in a year and there is no state tax).

What I want to know is: say, you live in Newyork and earn $120000 per annum. you are an individual and have no family. How much will you give to federal govt, then to state and to any other authority as income tax? Can you show me this step by step in a easy way, please?

Again, how can someone be entitled to investment tax credit and which securities are meant by that portfolio (?) invetment?

what is the difference between tax credit and tax rebate and tax exemption?

This is insanely complicated. If you want real answers you either need to get a tax expert or pay $40 US or so to download one of the tax programs (TurboTax or Tax Cut), plug in sample numbers, and see. First of all, just saying $120000 doesn't help. Is that salary, or is there some capital gains (sale of shares held over a year) or stock dividends? Assuming it's only salary, $120000 puts you in about the 36% tax bracket for federal, but there are lower brackets. The first $20K or so isn't taxed, the next 15K is 10% etc. (I'm pulling these numbers out of the air, google for "tax schedule" for real numbers. So you'd probably end up paying about $24K fed. It's been a while since i lived in NY state, but I suspect it's close to California, where state is about half federal so add $12K for state. Then, New York City itself has income tax! I never paid that but I bet it's close to the state number.

Investment tax credit is as far as I know only for corporations, not individuals.

Tax credit is an amount you deduct from the tax you owe. For example, if you have income you paid non-us income tax on (say you did some work for a company in Bangladesh, and they charged you tax) you can take the amount of that tax paid as credit -- you pay $100 in foriegn tax, take $100 off your US tax bill. Some tax credits are "refundable" meaning if the credits add up to more than your US tax you get money back (these mostly are low-income things, don't count on it.) Tax exemption is an amount you can deduct from the taxable income. For example, if you buy a house and borrow money (mortgage) to buy it, the money you pay in interest is deductable... So if you earn $120000 in that NYC job, and buy a nice little Brooklyn apartment with a $800000 mortgage at 6% you're paying $48000 in interest so you only have to pay tax on 120000-48000=72000 .

Tax rebate isn't a common term, people use it for things like getting the VAT back for exported items.

LATER: I remembered this nice federal income tax estimator I found a little while ago, courtesy MassMutual: http://www.massmutual.com/mmcalculators/...

Go here and fill in your estimated amounts. If you don't understand some of the terms, you can probably look them up in the IRS publication "Your Federal Income Tax" also known as "Publication 17". You can download that from http://www.irs.gov/formspubs/index.html (they'lll even send a free printed copy to US addresses.) Once you fill in the calculator, it will give you an estimate of the federal tax, which you can refine this way: take the number the calculator reports as "Adjusted Gross Income" (AGI). This is the income less the deductions. Look that AGI up according to the instructions on http://www.tax.state.ny.us/pit/income_ta... which will tell you both the state and city income tax. Finally, take that total tax number and plug it into the deduction section of the federal tax calculator -- state and local income taxes are deductable from the federal taxes. However, federal taxes are not deductable for state and local, so don't go back and refigure the state/local tax based on the new (lower) AGI the calculator may report. Now you have a pretty good idea of the federal, state, and local tax. However because of another complication called the Alternative Minimum Tax, you might not get the full benefit of the state/local tax deduction -- your federal tax might be somewhere between the higher number on the first trip and the lower number on the second trip.

You might consider working in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming instead of New York City -- those states have no income tax!