Federal income tax is a type of tax paid by all United States citizens based on their income. It is both a personal and a corporate tax. The federal government as revenue uses this specific type of tax. The income comes directly from the earnings of individuals, as well as unincorporated businesses. There are often certain exemptions that help to reduce this tax liability. Deductions are another form of deduction. These income taxes are also collected on a corporation's profits. As an income tax, the taxes are usually collected directly at the time of payroll, however, it is important for the individual to meet tax liabilities with or without payroll deductions. Income tax is due the year following the tax year.