In Matthews, North Carolina, 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 has the power to impose an income tax thanks to the 16th Amendment to the U.S. Constitution, enacted in 1916 after the Supreme Court had, on more than one occasion, found a federal income tax to be unconstitutional. Of course, before and after the creation of the federal income tax, states, including North Carolina were free to impose income taxes of their own.
While the federal income tax applies to everybody in the United States, the income taxes imposed by individual states vary widely, and some states have no income tax at all. You should consult with a Matthews, North Carolina tax Attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Matthews, North Carolina
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 simply a reduction in somebody's tax bill. A tax credit will typically reduce your tax liability far more than a tax deduction of the same amount.
Many common expenses in Matthews can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
How Can A Matthews, North Carolina 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 Matthews, North Carolina tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.