In Cherry Hill, New Jersey, 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 New Jersey were free to impose income taxes of their own.
The federal income tax must be paid by everybody 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 Attorney in Cherry Hill, New Jersey if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Cherry Hill, New Jersey
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.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a deduction of the same amount.
Many common expenses in Cherry Hill 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 Cherry Hill, New Jersey Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Cherry Hill, New Jersey 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.