The income tax in Downingtown, Pennsylvania is a tax imposed on all money earned and received during the year. Under federal law, income through any source may be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The authority 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 allowed to impose income taxes as they saw fit.
The federal income tax must be paid by everyone 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 Lawyer in Downingtown, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Downingtown, Pennsylvania
A tax deduction is a reduction in one's 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 conflated with a tax credit, which is a reduction in your tax bill. A tax credit usually results in a greater reduction in tax liability than a reduction in the same amount.
Under federal law, numerous expenses in Downingtown are tax-deductible, including interest paid on a mortgage, charitable donations, the price of tax advice, and union or professional dues, among many others.
How Can A Downingtown, Pennsylvania Tax Attorney Help?
Income tax law can get fairly complex in Downingtown, Pennsylvania. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Lawyer sooner, rather than later.