In Farmington, New Mexico, 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 Mexico.
While the federal government levies an income tax against every person and corporation in the U.S., the income taxes imposed by the states vary widely. Some states have relatively high income taxes, and a few have none at all. You should consult with a Farmington, New Mexico tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Farmington, New Mexico
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 expenses in Farmington are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Farmington, New Mexico Tax Attorney Help?
Income tax laws in Farmington, New Mexico can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.