The income tax in Providence County, 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 Providence County, Rhode Island if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Providence County, Rhode Island
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .
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 lower tax burden than a tax deduction of the same amount.
Lots of expenses that are common in Providence County are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Providence County, Rhode Island Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Providence County, 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.