The income tax in Charleston, South Carolina 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 South Carolina 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 Charleston, South Carolina if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Charleston, South Carolina
A tax deduction is simply a reduction in the part of a person's income that is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.
Lots of expenses that are common in Charleston are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Charleston, South Carolina 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 Charleston, South Carolina tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.