In Jersey City, New Jersey, 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 had the constitutional authority to impose an income tax since 1916, since the passage of the 16th Amendment. Before then, states could, and still can, impose whatever income tax they like, including in New Jersey.
While the federal income tax applies to everyone 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 Jersey City, New Jersey tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Jersey City, New Jersey
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 reduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,000.
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 Jersey 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 Jersey City, New Jersey Tax Attorney Help?
Income tax laws in Jersey City, New Jersey can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.