In Vine Grove, 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.
The federal income tax must be paid by everyone in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax Lawyer in Vine Grove, Kentucky if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Vine Grove, Kentucky
A tax deduction is a reduction in one's 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.
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.
Many common expenses in Vine Grove can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
How Can A Vine Grove, Kentucky Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Vine Grove, Kentucky tax Lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.