In South Bound Brook, 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 South Bound Brook, New Jersey tax attorney or accountant to find out if your state is one of them.
Income Tax Deductions in South Bound Brook, New Jersey
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit normally results in a greater reduction in tax liability than a deduction in the same amount.
Lots of expenses that are common in South Bound Brook are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A South Bound Brook, New Jersey Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a South Bound Brook, New Jersey tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.