Income Tax Lawyers in Lakewood, California
In Lakewood, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, 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 Lakewood, California tax attorney 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 authority to tax income under the 16th Amendment. Still, "tax protesters" employ some fringe constitutional arguments, none of which have been successful. In Lakewood, California, failing to pay your income tax can, and likely will, result in criminal prosecution.
Income Tax Deductions in Lakewood, 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.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will normally reduce your tax liability far more than a tax deduction of the same amount.
Lots of expenses that are common in Lakewood are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
If your state has an income tax, some of these expenses might be deductible from your state taxes, as well, but that depends on the law of California.
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How Can A Lakewood, California Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Lakewood, California and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.