In Desert Hot Springs, 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 Desert Hot Springs, California tax Attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Desert Hot Springs, California
A tax deduction is simply a reduction in the portion of a person's income which 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 one's tax bill. A tax credit typically results in a greater reduction in tax liability than a deduction in the same amount.
Lots of expenses that are common in Desert Hot Springs are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Desert Hot Springs, California Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Desert Hot Springs, California and have any questions about your taxes, you should consult with an accountant or local tax Attorney to avoid tax problems, such as audit or wage garnishment.