The income tax in Economy, 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 Economy, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Economy, Pennsylvania
A tax deduction is a reduction in your taxable income. It results in less of one's income being taxable, which causes a reduced tax liability.
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 reduced tax burden than a tax reduction of the same amount.
Lots of expenses that are common in Economy are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Economy, Pennsylvania Tax Attorney Help?
Income tax laws can get very complex. If you are in Economy, Pennsylvania and have any questions about your taxes, you should consult with an accountant or local tax lawyer to avoid tax problems, such as audit or wage garnishment.