The income tax in Chalfont, Pennsylvania is a tax imposed on all money earned and received during the year. Under federal law, income from any source can be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The power to tax incomes was granted to the federal government in 1913 with the ratification of the 16th Amendment to the Constitution. Before that time, the Supreme Court had found a federal income tax unconstitutional, prompting the passage of the amendment. Of course, individual states, including Pennsylvania, were free to impose income taxes as they saw fit.
The federal income tax must be paid by everybody in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax Attorney in Chalfont, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Chalfont, Pennsylvania
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,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 common expenses in Chalfont can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
How Can A Chalfont, Pennsylvania Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Chalfont, Pennsylvania 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.