Income Tax Lawyers in Fayetteville, Arkansas
In Fayetteville, Arkansas, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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 Arkansas 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 Fayetteville, Arkansas if you aren't clear about what system your state has.
For years, rumors have circulated that the federal income tax is illegal or unconstitutional. These rumors are false: the federal government has explicit constitutional power to tax income under the 16th Amendment. Still, "tax protesters" employ some fringe constitutional arguments, none of which have been successful. In Fayetteville, Arkansas, refusing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Fayetteville, Arkansas
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes $50,000 per year, and gets a $1,000 tax deduction, their taxable income is $49,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit usually results in a greater reduction in tax liability than a reduction in the same amount.
Many expenses in Fayetteville are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
If one's state has an income tax, some or all of these expenses may be deductible from your state income tax. The exact nature and extent of any deductions will depend on the laws of Arkansas.
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How Can A Fayetteville, Arkansas Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Fayetteville, Arkansas and run into any type of tax problems, including an audit or wage garnishment, a local tax lawyer would almost certainly be able to help.