In Gadsden, 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 Gadsden, Alabama if you don't know what the tax system is here.
Income Tax Deductions in Gadsden, Alabama
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax reduction of the same amount.
Lots of expenses that are common in Gadsden are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Gadsden, Alabama Tax Attorney Help?
Income tax law can get fairly complex in Gadsden, 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.