In Wake Forest, 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 Wake Forest, North Carolina tax attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Wake Forest, North Carolina
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower tax liability.
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 Wake Forest 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 Wake Forest, 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 Wake Forest, North Carolina tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.