In Little Rock, 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 Little Rock, Arkansas if you aren't clear about what system your state has.
Income Tax Deductions in Little Rock, Arkansas
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower 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 lower tax bill than a deduction of the same amount.
Many common expenses in Little Rock can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Little Rock, Arkansas Tax Attorney Help?
Income tax laws in Little Rock, Arkansas can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.