In Santa Fe, New Mexico, 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 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 fairly high income taxes, and a few have none at all. You should consult with a Santa Fe, New Mexico tax Lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Santa Fe, New Mexico
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax reduction of the same amount.
Many expenses in Santa Fe are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
How Can A Santa Fe, New Mexico Tax Attorney Help?
Income tax laws in Santa Fe, New Mexico can get very complex. You should speak with an accountant or tax Attorney if you have any questions about your income tax liability.