In Coolidge, Arizona, 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 Arizona 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 Coolidge, Arizona if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Coolidge, Arizona
A tax deduction is a reduction in one's taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
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 Coolidge are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Coolidge, Arizona Tax Attorney Help?
Income tax law can get fairly complex in Coolidge, Arizona. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Lawyer sooner, rather than later.