In Torrance, 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 Torrance, California if you aren't clear about what system your state has.
Income Tax Deductions in Torrance, California
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit usually results in a greater reduction in tax liability than a deduction in the same amount.
Lots of expenses that are common in Torrance are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Torrance, California Tax Attorney Help?
Income tax law can get fairly complex in Torrance, 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.