The income tax in Bristol, Rhode Island 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 has the power 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 free to impose income taxes of their own.
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 Bristol, Rhode Island if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Bristol, Rhode Island
A tax deduction is a reduction in your 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 deduction of the same amount.
Lots of expenses that are common in Bristol are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Bristol, Rhode Island Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Bristol, Rhode Island and run into any type of tax problems, including an audit or wage garnishment, a local tax Attorney would almost certainly be able to help.