In Penn Yan, 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 Penn Yan, New York tax Attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Penn Yan, New York
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make ,000 in a year, and the tax rate is 10%, a deduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,000.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will normally reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Penn Yan 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 Penn Yan, New York Tax Attorney Help?
Income tax laws in Penn Yan, New York can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.