In Coventry, Connecticut, 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 Connecticut, 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 Coventry, Connecticut if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Coventry, Connecticut
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.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit normally results in a greater reduction in tax liability than a reduction in the same amount.
Many common expenses in Coventry 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 Coventry, Connecticut Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Coventry, Connecticut 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.