Income Tax Lawyers in Conway, Arkansas
In Conway, Arkansas, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, 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 Arkansas 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 Conway, Arkansas if you aren't clear about what system your state has.
There are many rumors floating about which claim that you don't really have to pay a federal income tax. These "tax protestors" rely on the false notion that the income tax is unconstitutional, or otherwise invalid. This is based on some fairly bizarre interpretations of the constitution and tax code, and suffice it to say, none of them have had much legal success. You should know that if you don't pay your federal taxes in Conway, Arkansas, you will face criminal charges.
Income Tax Deductions in Conway, Arkansas
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make $50,000 in a year, and the tax rate is 10%, a deduction of $1,000 results in only $49,000 being taxed. This means that you will pay $4,900 instead of $5,000.
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 Conway 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 Arkansas
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How Can A Conway, Arkansas Tax Attorney Help?
Income tax laws in Conway, Arkansas can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.