In Colorado Springs, Colorado, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, 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 Colorado Springs, Colorado if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Colorado Springs, Colorado
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.
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 typically reduces your tax bill more than a reduction of the same amount.
Many common expenses in Colorado Springs 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 Colorado Springs, Colorado Tax Attorney Help?
Income tax laws in Colorado Springs, Colorado can get very complex. You should speak with an accountant or tax Attorney if you have any questions about your income tax liability.