Internal Revenue Code section 1

Section 1 of the Internal Revenue Code (26 U.S.C. § 1 or simply IRC §1), titled "Tax Imposed" is the law which requires all American individuals to pay a federal income tax, and sets forth the amount of the tax to be paid. A similar tax on corporations and other entities established to do business is set forth in IRC §11.

Within the layout of the IRC, this section appears as follows:

• Subtitle A - Income Taxes (§§ 1-1563)
  • Chapter 1 - Normal Taxes and Surtaxes (§§ 1-1400L)
    • Subchapter A - Determination of Tax Liability (§§ 1-59)
      • Part I - Tax on Individuals (§§ 1-59)
        • Section 1 - Tax imposed

§1 divides income earners into categories depending on whether they are married or single and based on their wealth, and sets forth the exact dollar amount or percentage of income which must be paid to the United States. For example, §1(b) states:

(b) Heads of households

There is hereby imposed on the taxable income of every head of a household (as defined in section 2 (b)) a tax determined in accordance with the following table:

If taxable income is:	The tax is:
Not over $29,600	15% of taxable income.
Over $29,600 but not over $76,400	$4,440, plus 28% of the excess over $29,600.
Over $76,400 but not over $127,500	$17,544, plus 31% of the excess over $76,400.
Over $127,500 but not over $250,000	$33,385, plus 36% of the excess over $127,500.
Over $250,000	$77,485, plus 39.6% of the excess over $250,000.

Thus, a person who meets the description of a "head of a household" with a taxable income of $50,000 in a given year would look to the table and see that they fall within the category of persons earning "Over $29,600 but not over $76,400". Their tax would be:

$4,440, plus 28% of the excess over $29,600

which is equal to

$4,440, plus 28% of ($50,000 - $29,600)

$50,000 minus $29,600 equals $20,400, and 28% of $20,400 is $5,712, so the total tax due on an income of $50,000 would be ($4,400 + $5,712), for a final total of $10,152. This figure, however, does not account for a number of important variables. For example, the tax only applies to taxable income, which is defined in IRC §63 by reference to IRC §61. However, a taxpayer may have some "income" that is not taxable, such as the "income" from selling a piece of property at a loss. A taxpayer may be also able to take tax deductions for certain expenses, which would allow him to claim a lower taxable income.