In New Milford, 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 New Milford, New Jersey tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in New Milford, New Jersey
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 .
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 reduced tax bill than a reduction of the same amount.
Under federal law, numerous expenses in New Milford 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 New Milford, New Jersey Tax Attorney Help?
Income tax law can get fairly complex in New Milford, New Jersey. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.