In Eldridge, Iowa, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, income from all sources can be taxed. The federal government has the constitutional power to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had repeatedly declared the federal income tax unconstitutional, but individual states, including Iowa were free to impose an income tax if they saw fit.
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 Eldridge, Iowa tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Eldridge, Iowa
A tax deduction is simply a reduction in the portion of a person's income which is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit typically results in a greater reduction in tax liability than a deduction in the same amount.
Many expenses in Eldridge are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Eldridge, Iowa Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Eldridge, Iowa and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.