Income Tax Lawyers in Davis, California
In Davis, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, income from all sources may be taxed. The federal government has had explicit constitutional authority to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had consistently found a federal income tax to be unconstitutional. States, including California, have always been allowed 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 fairly high income taxes, and a few have none at all. You should consult with a Davis, California tax lawyer if you don't know what type of tax system your state has.
You might have heard rumors claiming that you don't really have to pay your federal income tax. These rumors are false. "Tax protesters" rely on bizarre and discredited legal arguments in their claims that the federal income tax is somehow illegal. None of these arguments have ever been successful in U.S. Courts, and deliberately refusing to pay your income tax in Davis, California is a good way to end up in federal prison.
Income Tax Deductions in Davis, California
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes $50,000 per year, and gets a $1,000 tax deduction, their taxable income is $49,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit normally results in a greater reduction in tax liability than a reduction in the same amount.
Many expenses in Davis are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
If one's state has an income tax, some or all of these expenses may be deductible from your state income tax. The exact nature and extent of any deductions will depend on the laws of California.
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How Can A Davis, California Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Davis, California and run into any type of tax problems, including an audit or wage garnishment, a local tax lawyer would almost certainly be able to help.