The income tax in Barrington, Rhode Island 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 Rhode Island 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 Barrington, Rhode Island if you are not clear about what your state and federal tax liability.

Income Tax Deductions in Barrington, Rhode Island

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 confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will typically reduce your tax liability far more than a tax reduction of the same amount.

Lots of expenses that are common in Barrington are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A Barrington, Rhode Island 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 Barrington, Rhode Island tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.