In Lyndon, Kentucky, income tax is imposed on most sources of income that a person receives in a given year. Under federal, state, and most local laws income from all sources can be taxed. The federal government has had explicit constitutional power to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had repeatedly found a federal income tax to be unconstitutional. States, including Kentucky, have always been free to impose whatever type of income tax they liked.
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 Lyndon, Kentucky if you aren't clear about what system your state has.
Income Tax Deductions in Lyndon, Kentucky
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 deduction 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 lower tax burden than a tax deduction of the same amount.
Many common expenses in Lyndon can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Lyndon, Kentucky Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Lyndon, Kentucky tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.