In Maricopa County, 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 Maricopa County, Arizona if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Maricopa County, 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 ,000 in income last year. If you received a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would lower your tax liability from to .
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit typically reduces your tax bill more than a reduction of the same amount.
Under federal law, numerous expenses in Maricopa County are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Maricopa County, Arizona Tax Attorney Help?
Income tax laws in Maricopa County, Arizona can get very complex. You should speak with an accountant or tax Attorney if you have any questions about your income tax liability.