Income Tax Lawyers in Lincoln, Alabama
In Lincoln, 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 Lincoln, 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 Lincoln, Alabama, failing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Lincoln, Alabama
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had $50,000 in income last year. If you got a $1,000 tax deduction, your taxable income would be $49,000, and you would have to pay 10% on that. So, it would reduce your tax liability from $5000 to $4900.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.
Many common expenses in Lincoln can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
If your state imposes an income tax, some or all of these expenses might be deductible, as well. However, this will depend on the law of Alabama
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How Can A Lincoln, Alabama Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Lincoln, Alabama and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.