Income Tax Lawyers in Ojai, California
In Ojai, 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.
Everyone 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 Ojai, California if you aren't clear about what system your state has.
You may have heard rumors that the income tax is unconstitutional, and one's requirement to pay the federal income tax can be argued in court. However, this position relies on fringe constitutional arguments which have never been adopted by any U.S. court. If you refuse to pay your federal income tax in Ojai, California, you will face criminal charges.
Income Tax Deductions in Ojai, 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 reduction of $1,000 results in only $49,000 being taxed. This means that you will pay $4,900 instead of $5,000.
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 Ojai 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 you reside in a state that has an income tax, some of these expenses may also be deductible, though that depends on the individual tax laws of California.
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How Can A Ojai, 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 Ojai, California tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.