Income Tax Lawyers in Pine Bluff, Arkansas
In Pine Bluff, Arkansas, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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.
The federal income tax must be paid by everybody in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax attorney in Pine Bluff, Arkansas if you are not clear about what your state and federal tax liability.
You may have heard rumors that the income tax is unconstitutional, and one's obligation to pay the federal income tax can be fought 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 Pine Bluff, Arkansas, you will face criminal charges.
Income Tax Deductions in Pine Bluff, 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.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Pine Bluff are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
If your state has an income tax, it likely has many of the same deductions, though they could vary widely. This will depend on the particular laws of Arkansas.
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How Can A Pine Bluff, Arkansas Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Pine Bluff, Arkansas tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.