In Shenandoah, Iowa, 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 the constitutional authority to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had consistently declared the federal income tax unconstitutional, but individual states, including Iowa were allowed to impose an income tax if they saw fit.
Everyone 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 live. Some states have no income tax at all. You should speak with an accountant or tax lawyer in Shenandoah, Iowa if you don't know what the tax system is here.
Income Tax Deductions in Shenandoah, Iowa
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 confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a reduced tax burden than a tax reduction of the same amount.
Many common expenses in Shenandoah can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
How Can A Shenandoah, Iowa Tax Attorney Help?
Income tax law can get fairly complex in Shenandoah, Iowa. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.