In Folsom, 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 Folsom, California tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Folsom, California
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower tax liability.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit typically reduces your tax bill more than a deduction of the same amount.
Many common expenses in Folsom can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Folsom, California Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Folsom, 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.