In Lawrence, New York, 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 the constitutional power to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had repeatedly declared the federal income tax unconstitutional, but individual states, including New York were free to impose an income tax if they saw fit.
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 Lawrence, New York tax attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Lawrence, New York
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.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will typically reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Lawrence are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Lawrence, New York 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 Lawrence, New York tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.