Income Tax Lawyers in Headland, Alabama
In Headland, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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 Headland, 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 authority to tax income under the 16th Amendment. Still, "tax protesters" employ some fringe constitutional arguments, none of which have been successful. In Headland, Alabama, failing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Headland, Alabama
A tax deduction is a reduction in your 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 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 deduction of the same amount.
Under federal law, many expenses in Headland are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
If your state has an income tax, it likely has many of the same deductions, though they could vary widely. This will depend on the particular laws of Alabama.
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How Can A Headland, Alabama Tax Attorney Help?
Income tax law can get fairly complex in Headland, Alabama. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.