In New Albany, Ohio, 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 Ohio were free to impose an income tax if they saw fit.
Everybody in the United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in New Albany, Ohio if you aren't clear about what system your state has.
Income Tax Deductions in New Albany, Ohio
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 usually reduce your tax liability far more than a tax deduction of the same amount.
Many expenses in New Albany are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A New Albany, Ohio Tax Attorney Help?
Income tax laws are notoriously complex. If you live in New Albany, Ohio 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.