In Rancho Palos Verdes, California, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, 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 Rancho Palos Verdes, California if you aren't clear about what system your state has.
Income Tax Deductions in Rancho Palos Verdes, California
A tax deduction is a reduction in your taxable income. It results in less of one's income being taxable, which causes a reduced tax liability.
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a reduced tax burden than a tax reduction of the same amount.
Many common expenses in Rancho Palos Verdes 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.
How Can A Rancho Palos Verdes, California Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Rancho Palos Verdes, California and run into any type of tax problems, including an audit or wage garnishment, a local tax lawyer would almost certainly be able to help.