Final answer:
A corporation can choose any fiscal year-end that best suits its business needs. The IRS oversees tax law compliance, and politics can influence these tax laws. The social security tax is a proportional tax due to the constant rate applied up to the income cap.
Step-by-step explanation:
When selecting a tax year, a corporation can choose its fiscal year-end based on what may best suit its business needs. The timing of salary payments can influence tax obligations, as it affects the taxable income in a particular year. Corporations must adhere to federal income tax laws and consider various taxes when managing their finances, including corporate income tax, individual income tax on salaries, and payroll taxes.
The Internal Revenue Service (IRS) is the main federal agency responsible for administering and enforcing tax laws. It also collects federal taxes, issues regulations, and oversees compliance. Tax laws can be influenced by politics, as changes in policies and tax rates usually reflect the priorities of the government in power.
Social security tax, at a rate of 6.2% on employees' income below a certain threshold, is considered a proportional tax because the rate does not change with the income level, up to the cap. If you're self-employed or own a corporation, you need to consider several types of federal tax such as income tax, self-employment tax, and potentially others depending on your specific situation.