Income Tax Lawyers in Moody, Alabama
In Moody, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, 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 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 Moody, Alabama if you aren't clear about what system your state has.
You may have heard rumors that the income tax is unconstitutional, and one's requirement to pay the federal income tax can be argued in court. However, this position relies on fringe constitutional arguments which have never been adopted by any U.S. court. If you refuse to pay your federal income tax in Moody, Alabama, you will face criminal charges.
Income Tax Deductions in Moody, Alabama
A tax deduction is a reduction in one's 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 conflated with a tax credit, which is a reduction in your tax bill. A tax credit normally results in a greater reduction in tax liability than a reduction in the same amount.
Lots of expenses that are common in Moody are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
If you reside in a state that has an income tax, some of these expenses may also be deductible, though that depends on the individual tax laws of Alabama.
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How Can A Moody, Alabama Tax Attorney Help?
Income tax law can get fairly complex in Moody, 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.