In Del Mar, 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 Del Mar, California tax Lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Del Mar, California
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,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 common expenses in Del Mar can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Del Mar, California Tax Attorney Help?
Income tax laws in Del Mar, California can get very complex. You should speak with an accountant or tax Attorney if you have any questions about your income tax liability.