Income Tax Lawyers in Hercules, California
In Hercules, 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 Hercules, California tax lawyer if you don't know what type of tax system your state has.
For years, rumors have circulated that the federal income tax is illegal or unconstitutional. These rumors are false: the federal government has explicit constitutional power to tax income under the 16th Amendment. Still, "tax protesters" employ some fringe constitutional arguments, none of which have been successful. In Hercules, California, refusing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Hercules, 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.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a reduced tax bill than a reduction of the same amount.
Many common expenses in Hercules 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.
If one's state has an income tax, it likely has many of the same deductions, though they could vary widely. This will depend on the individual laws of California.
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How Can A Hercules, California Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Hercules, California tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.