In South Sioux City, Nebraska, the income tax is a tax imposed on money received (income) during a given set time period. Under federal law, and the laws of most states, income from any source may be taxed. The federal government has the authority 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 Nebraska were allowed to impose income taxes of their own.

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 South Sioux City, Nebraska if you are not clear about what your state and federal tax liability.

Income Tax Deductions in South Sioux City, Nebraska

A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you received a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would lower your tax liability from to .

This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.

Under federal law, numerous expenses in South Sioux City are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.

How Can A South Sioux City, Nebraska Tax Attorney Help?

Income tax law can get fairly complex in South Sioux City, Nebraska. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.