Income Tax Lawyers in Jefferson County, Alabama
In Jefferson County, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, income from all sources may be taxed. The federal government has the authority 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 allowed to impose income taxes of their own.
Everyone 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 live. Some states have no income tax at all. You should speak with an accountant or tax lawyer in Jefferson County, Alabama if you don't know what the tax system is here.
For years, rumors have circulated that the federal income tax is illegal or unconstitutional. These rumors are false: the federal government has explicit constitutional power to tax income under the 16th Amendment. Still, "tax protesters" employ some fringe constitutional arguments, none of which have been successful. In Jefferson County, Alabama, refusing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Jefferson County, Alabama
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had $50,000 in income last year. If you received a $1,000 tax deduction, your taxable income would be $49,000, and you would have to pay 10% on that. So, it would lower your tax liability from $5000 to $4900.
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 reduced tax burden than a tax reduction of the same amount.
Many common expenses in Jefferson County can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
If one's state has an income tax, some of these expenses may be deductible from your state taxes, as well, but that depends on the law of Alabama.
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How Can A Jefferson County, Alabama Tax Attorney Help?
Income tax laws in Jefferson County, Alabama can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.