Atto Payroll system handles tax calculations by using a variety of data sources, including:
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Tax laws and regulations: Atto has access to a database of tax laws and regulations from all levels of government, including federal, state, and local. This database is updated regularly to reflect changes in the tax code.
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Tax jurisdictions: Atto has a database of all tax jurisdictions in the United States. This database includes information about the tax rates and rules applicable to each jurisdiction.
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Taxpayer information: Atto can access taxpayer information such as income, deductions, and credits. This information is used to calculate the taxpayer's tax liability.
To calculate taxes, Atto payroll system first determines the taxpayer's taxable income. This is done by subtracting any deductions and exemptions from the taxpayer's gross income. Once the taxable income is known, the system applies the appropriate tax rates to calculate the taxpayer's federal, state, and local tax liability.