The income tax in Cheltenham, 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 Cheltenham, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Cheltenham, 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 normally reduce your tax liability far more than a tax deduction of the same amount.
Lots of expenses that are common in Cheltenham are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Cheltenham, Pennsylvania Tax Attorney Help?
Income tax law can get fairly complex in Cheltenham, Pennsylvania. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.