In Newport Beach, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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.
Everybody in the United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Newport Beach, California if you aren't clear about what system your state has.
Income Tax Deductions in Newport Beach, 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 usually reduces your tax bill more than a deduction of the same amount.
Under federal law, many expenses in Newport Beach are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Newport Beach, California Tax Attorney Help?
Income tax law can get fairly complex in Newport Beach, California. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Attorney sooner, rather than later.