In Oxford, Alabama, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, 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 Oxford, Alabama if you aren't clear about what system your state has.
Income Tax Deductions in Oxford, Alabama
A tax deduction is a reduction in your taxable income. It results in less of one's income being taxable, which causes a reduced tax liability.
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 reduced tax bill than a reduction of the same amount.
Under federal law, numerous expenses in Oxford are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Oxford, Alabama Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call an Oxford, Alabama tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.