In Old Saybrook, Connecticut, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Generally, income from all sources can be taxed. The federal government has had the constitutional power to impose an income tax since 1916, since the passage of the 16th Amendment. Before then, states could, and still can, impose whatever income tax they like, including in Connecticut.
While the federal government levies an income tax against every person and corporation in the U.S., the income taxes imposed by the states vary widely. Some states have relatively high income taxes, and a few have none at all. You should consult with an Old Saybrook, Connecticut tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Old Saybrook, Connecticut
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower tax liability.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax deduction of the same amount.
Many expenses in Old Saybrook are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Old Saybrook, Connecticut Tax Attorney Help?
Income tax laws in Old Saybrook, Connecticut can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.