In Aspen, Colorado, 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 Colorado, have always been allowed to impose whatever type of income tax they liked.
The federal income tax must be paid by everyone 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 Lawyer in Aspen, Colorado if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Aspen, Colorado
A tax deduction is a reduction in one's 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.
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit usually reduces your tax bill more than a reduction of the same amount.
Under federal law, numerous expenses in Aspen are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Aspen, Colorado Tax Attorney Help?
Income tax laws in Aspen, Colorado can get very complex. You should speak with an accountant or tax Attorney if you have any questions about your income tax liability.