In Rocky Mount, 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 Rocky Mount, North Carolina tax Attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Rocky Mount, 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 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 Rocky Mount 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 Rocky Mount, North Carolina Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Rocky Mount, North Carolina and run into any type of tax problems, including an audit or wage garnishment, a local tax Attorney would almost certainly be able to help.