In Woodbury, 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 Woodbury, New York tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Woodbury, 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 .
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a lower tax burden than a tax deduction of the same amount.
Lots of expenses that are common in Woodbury are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Woodbury, New York Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Woodbury, New York and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.