In Collinsville, Illinois, an income tax is imposed on a certain percentage of the income of all individuals and businesses. Usually, 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 Illinois were allowed to impose an income tax if they saw fit.
Everyone in the United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Collinsville, Illinois if you aren't clear about what system your state has.
Income Tax Deductions in Collinsville, Illinois
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a reduced tax bill than a reduction of the same amount.
Lots of expenses that are common in Collinsville are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Collinsville, Illinois Tax Attorney Help?
Income tax laws can get very complex. If you are in Collinsville, Illinois and have any questions about your taxes, you should consult with an accountant or local tax lawyer to avoid tax problems, such as audit or wage garnishment.