In Moss Point, Mississippi, the income tax is a tax imposed on money received (income) during a certain set time period. Under federal law, and the laws of most states, income from any source can be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The power to tax incomes was granted to the federal government in 1913 with the ratification of the 16th Amendment to the Constitution. Before that time, the Supreme Court had found a federal income tax unconstitutional, prompting the passage of the amendment. Of course, individual states, including Mississippi, were free to impose income taxes as 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 Moss Point, Mississippi if you aren't clear about what system your state has.
Income Tax Deductions in Moss Point, Mississippi
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.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.
Many common expenses in Moss Point 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 Moss Point, Mississippi 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 Moss Point, Mississippi tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.