The term federal taxes apply to any type of tax paid to the federal government of the United States. The Internal Revenue Service, or IRS, handles the collection of federal funds. Taxes paid to the IRS include income taxes and estate taxes, as well as others. These taxes provide revenue for the federal government to spend as necessary for the well-being of the entire country. Both personal and corporate income taxes are paid to the federal government. The amount of taxes paid is based on a variety of factors, including the federal tax bracket, the exemptions and the deductions available to the user. Most federal dollars come from federal taxes charged to individuals and to corporations within the country.