In Lancaster, Kentucky, income tax is imposed on most sources of income that a person receives in a certain year. Under federal, state, and most local laws income from all sources may be taxed. The federal government has had explicit constitutional authority to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had consistently found a federal income tax to be unconstitutional. States, including Kentucky, have always been allowed to impose whatever type of income tax they liked.
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 Lancaster, Kentucky if you aren't clear about what system your state has.
Income Tax Deductions in Lancaster, Kentucky
A tax deduction is a reduction in your taxable income. It results in less of one's income being taxable, which causes a reduced tax liability.
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a reduction of the same amount.
Under federal law, numerous expenses in Lancaster are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Lancaster, Kentucky Tax Attorney Help?
Income tax laws can get very complex. If you are in Lancaster, Kentucky 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.