In Olean, 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 an Olean, New York tax attorney or accountant to find out if your state is one of them.

Income Tax Deductions in Olean, New York

A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .

There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.

Lots of expenses that are common in Olean are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A Olean, 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 an Olean, New York tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.