In Adams County, Colorado, 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 Colorado, have always been free to impose whatever type of income tax they liked.
The federal income tax must be paid by everybody in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax attorney in Adams County, Colorado if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Adams County, Colorado
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 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.
Many common expenses in Adams County can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
How Can A Adams County, Colorado Tax Attorney Help?
Income tax laws in Adams County, Colorado can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.