The income tax in Harrisburg, South Dakota 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 had explicit constitutional power to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had repeatedly found a federal income tax to be unconstitutional. States, including South Dakota, have always been free to impose whatever type of income tax they liked.
While the federal income tax applies to everybody in the United States, the income taxes imposed by individual states vary widely, and some states have no income tax at all. You should consult with a Harrisburg, South Dakota tax attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Harrisburg, South Dakota
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make ,000 in a year, and the tax rate is 10%, a deduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,000.
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 lower tax bill than a deduction of the same amount.
Under federal law, many expenses in Harrisburg are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Harrisburg, South Dakota Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Harrisburg, South Dakota tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.