Income Tax Lawyers in Fayette, Alabama
In Fayette, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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 Fayette, 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 Fayette, Alabama, refusing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Fayette, Alabama
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes $50,000 per year, and gets a $1,000 tax deduction, their taxable income is $49,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit usually results in a greater reduction in tax liability than a reduction in the same amount.
Lots of expenses that are common in Fayette are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
If you reside in a state that has an income tax, some of these expenses may also be deductible, though that depends on the particular tax laws of Alabama.
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How Can A Fayette, Alabama Tax Attorney Help?
Income tax law can get fairly complex in Fayette, Alabama. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.