In Pensacola, Florida, 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 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 Florida.
Everybody in the U.S. is subject to the federal income tax. But you are only subject to the income tax of the state in which you reside. Some states have no income tax at all. You should speak with an accountant or tax Attorney in Pensacola, Florida if you don't know what the tax system is here.
Income Tax Deductions in Pensacola, Florida
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 .
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a deduction of the same amount.
Many expenses in Pensacola are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Pensacola, Florida Tax Attorney Help?
Income tax laws in Pensacola, Florida can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.