The income tax in Ellwood City, 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 Ellwood City, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Ellwood City, Pennsylvania
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower tax liability.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.
Lots of expenses that are common in Ellwood City are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Ellwood City, Pennsylvania Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call an Ellwood City, Pennsylvania tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.