The income tax in Huron, South Dakota 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 had explicit constitutional authority to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had consistently found a federal income tax to be unconstitutional. States, including South Dakota, have always been allowed to impose whatever type of income tax they liked.
While the federal income tax applies to everyone 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 Huron, South Dakota tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Huron, 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 reduction 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 reduced tax bill than a reduction of the same amount.
Many common expenses in Huron can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Huron, South Dakota 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 Huron, South Dakota tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.