Income Tax Lawyers in Clanton, Alabama
In Clanton, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, income from all sources can be taxed. The federal government has the power to impose an income tax thanks to the 16th Amendment to the U.S. Constitution, enacted in 1916 after the Supreme Court had, on more than one occasion, found a federal income tax to be unconstitutional. Of course, before and after the creation of the federal income tax, states, including Alabama were free to impose income taxes of their own.
Everybody in the U.S. is subject to the federal income tax. But you are only subject to the income tax of the state in which you reside. Some states have no income tax at all. You should speak with an accountant or tax attorney in Clanton, Alabama if you don't know what the tax system is here.
You might have heard rumors claiming that you don't actually have to pay your federal income tax. These rumors are false. "Tax protesters" rely on bizarre and discredited legal arguments in their claims that the federal income tax is somehow illegal. None of these arguments have ever been successful in U.S. Courts, and deliberately failing to pay your income tax in Clanton, Alabama is a good way to end up in federal prison.
Income Tax Deductions in Clanton, Alabama
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make $50,000 in a year, and the tax rate is 10%, a deduction of $1,000 results in only $49,000 being taxed. This means that you will pay $4,900 instead of $5,000.
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a lower tax burden than a tax deduction of the same amount.
Many common expenses in Clanton can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
If your state has an income tax, some or all of these expenses might be deductible from your state income tax. The exact nature and extent of any deductions will depend on the laws of Alabama.
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How Can A Clanton, Alabama Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Clanton, Alabama and have any questions about your taxes, you should consult with an accountant or local tax attorney to avoid tax problems, such as audit or wage garnishment.