In Madisonville, 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 Madisonville, Kentucky if you aren't clear about what system your state has.
Income Tax Deductions in Madisonville, 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 reduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.
Under federal law, numerous expenses in Madisonville 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 Madisonville, Kentucky Tax Attorney Help?
Income tax laws in Madisonville, Kentucky can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.