Income Tax Lawyers in Citrus Heights, California
In Citrus Heights, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, income from all sources can be taxed. The federal government has had explicit constitutional power to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had repeatedly found a federal income tax to be unconstitutional. States, including California, have always been free to impose whatever type of income tax they liked.
While the federal government levies an income tax against every person and corporation in the U.S., the income taxes imposed by the states vary widely. Some states have relatively high income taxes, and a few have none at all. You should consult with a Citrus Heights, California tax attorney if you don't know what type of tax system your state has.
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 Citrus Heights, California, you will face criminal charges.
Income Tax Deductions in Citrus Heights, California
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make $50,000 in a year, and the tax rate is 10%, a deduction of $1,000 results in only $49,000 being taxed. This means that you will pay $4,900 instead of $5,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit typically results in a greater reduction in tax liability than a deduction in the same amount.
Under federal law, many expenses in Citrus Heights 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 imposes an income tax, some or all of these expenses might be deductible, as well. However, this will depend on the law of California
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How Can A Citrus Heights, California 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 Citrus Heights, California tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.