Income Tax Lawyers in Clayton, California
In Clayton, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, 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 Clayton, 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 Clayton, California, you will face criminal charges.
Income Tax Deductions in Clayton, 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 normally results in a greater reduction in tax liability than a deduction in the same amount.
Many expenses in Clayton are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
If you live in a state that has an income tax, some of these expenses might also be deductible, though that depends on the individual tax laws of California.
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How Can A Clayton, California Tax Attorney Help?
Income tax law can get fairly complex in Clayton, California. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.