In Downers Grove, Illinois, 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 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 Illinois were free to impose an income tax if they saw fit.
Everybody 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 Downers Grove, Illinois if you aren't clear about what system your state has.
Income Tax Deductions in Downers Grove, Illinois
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will normally reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Downers Grove are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Downers Grove, Illinois Tax Attorney Help?
Income tax law can get fairly complex in Downers Grove, Illinois. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.