In Smithtown, 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 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 Smithtown, New York tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Smithtown, 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 Smithtown 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 Smithtown, New York Tax Attorney Help?
Income tax law can get fairly complex in Smithtown, New York. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.