The income tax in Warminster, 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 has the authority to impose an income tax thanks to the 16th Amendment to the U.S. Constitution, enacted in 1916 after the Supreme Court had, on more than one occasion, found a federal income tax to be unconstitutional. Of course, before and after the creation of the federal income tax, states, including Pennsylvania were allowed to impose income taxes of their own.
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 Warminster, Pennsylvania if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Warminster, 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.
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 reduced tax bill than a reduction of the same amount.
Many common expenses in Warminster can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Warminster, Pennsylvania Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Warminster, Pennsylvania tax Lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.