In El Paso 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 El Paso County, Colorado if you are not clear about what your state and federal tax liability.

Income Tax Deductions in El Paso County, Colorado

A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .

This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit normally results in a greater reduction in tax liability than a deduction in the same amount.

Lots of expenses that are common in El Paso County are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A El Paso County, Colorado Tax Attorney Help?

Income tax laws are notoriously complex. If you live in El Paso County, Colorado and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.