In Prospect Park, 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 had the constitutional power 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 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 Prospect Park, New Jersey tax Attorney or accountant to find out if your state is one of them.

Income Tax Deductions in Prospect Park, 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 deduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,000.

This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will normally reduce your tax liability far more than a tax deduction of the same amount.

Many expenses in Prospect Park are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.

How Can A Prospect Park, New Jersey Tax Attorney Help?

Income tax law can get fairly complex in Prospect Park, New Jersey. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Attorney sooner, rather than later.