In Trinidad, Colorado, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Typically, 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 Trinidad, Colorado if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Trinidad, Colorado
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a reduced tax bill than a reduction of the same amount.
Lots of expenses that are common in Trinidad are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Trinidad, Colorado Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Trinidad, Colorado and run into any type of tax problems, including an audit or wage garnishment, a local tax Lawyer would almost certainly be able to help.