In Millbrook, 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 United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Millbrook, Alabama if you aren't clear about what system your state has.
Income Tax Deductions in Millbrook, Alabama
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit typically results in a greater reduction in tax liability than a deduction in the same amount.
Under federal law, many expenses in Millbrook are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Millbrook, Alabama Tax Attorney Help?
Income tax laws in Millbrook, Alabama can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.