Income Tax Lawyers in Hanford, California
In Hanford, 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 Hanford, California tax attorney if you don't know what type of tax system your state has.
You might have heard rumors claiming that you don't actually 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 failing to pay your income tax in Hanford, California is a good way to end up in federal prison.
Income Tax Deductions in Hanford, 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 typically results in a greater reduction in tax liability than a deduction in the same amount.
Many common expenses in Hanford 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.
If you live in a state that has an income tax, some of these expenses might also be deductible, though that depends on the specific tax laws of California.
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How Can A Hanford, California Tax Attorney Help?
Income tax laws in Hanford, California can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.