In Wolcott, 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 the constitutional authority 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 fairly high income taxes, and a few have none at all. You should consult with a Wolcott, Connecticut tax Lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Wolcott, Connecticut
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make ,000 in a year, and the tax rate is 10%, a reduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,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.
Under federal law, numerous expenses in Wolcott are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Wolcott, Connecticut Tax Attorney Help?
Income tax law can get fairly complex in Wolcott, Connecticut. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Lawyer sooner, rather than later.