Income Tax Lawyers in Bay Minette, Alabama
In Bay Minette, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, 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 Bay Minette, Alabama if you don't know what the tax system is here.
You might have heard rumors claiming that you don't really 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 refusing to pay your income tax in Bay Minette, Alabama is a good way to end up in federal prison.
Income Tax Deductions in Bay Minette, Alabama
A tax deduction is a reduction in one's taxable income. For example, if a person makes $50,000 per year, and receives a $2,000 tax deduction, they will only have to pay taxes on the remaining $48,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.
Many common expenses in Bay Minette can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
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 Bay Minette, Alabama Tax Attorney Help?
Income tax laws in Bay Minette, Alabama can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.