Income Tax Lawyers in Helena, Alabama
In Helena, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, 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 Helena, 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 Helena, Alabama, failing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Helena, 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 typically reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Helena 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, some or all of these expenses might be deductible from your state income tax. The exact nature and extent of any deductions will depend on the laws of Alabama.
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How Can A Helena, Alabama Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Helena, Alabama tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.