Income Tax Lawyers in Litchfield Park, Arizona
In Litchfield Park, Arizona, 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 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 Litchfield Park, Arizona if you are not clear about what your state and federal tax liability.
There are many rumors floating about which claim that you don't actually have to pay a federal income tax. These "tax protestors" rely on the false notion that the income tax is unconstitutional, or otherwise invalid. This is based on some fairly bizarre interpretations of the constitution and tax code, and suffice it to say, none of them have had much legal success. You should know that if you don't pay your federal taxes in Litchfield Park, Arizona, you will face criminal charges.
Income Tax Deductions in Litchfield Park, Arizona
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had $50,000 in income last year. If you received a $1,000 tax deduction, your taxable income would be $49,000, and you would have to pay 10% on that. So, it would lower your tax liability from $5000 to $4900.
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 reduced tax bill than a reduction of the same amount.
Lots of expenses that are common in Litchfield Park 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, it likely has many of the same deductions, though they could vary widely. This will depend on the particular laws of Arizona.
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How Can A Litchfield Park, Arizona Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Litchfield Park, Arizona tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.