Income Tax Lawyers in Prescott, Arkansas

Income Tax Attorneys in Prescott, AR

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In Prescott, Arkansas, 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 Arkansas were allowed to impose income taxes of their own.

The federal income tax must be paid by everyone 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 lawyer in Prescott, 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 requirement to pay the federal income tax can be argued 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 Prescott, Arkansas, you will face criminal charges.

Income Tax Deductions in Prescott, Arkansas

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.

This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will typically reduce your tax liability far more than a tax reduction of the same amount.

Lots of expenses that are common in Prescott are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

If one's state has an income tax, some of these expenses may be deductible from your state taxes, as well, but that depends on the law of Arkansas.

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How Can A Prescott, Arkansas Tax Attorney Help?

Income tax laws are notoriously complex. If you reside in Prescott, 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.

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