The income tax in Sioux Falls, 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 Sioux Falls, South Dakota tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Sioux Falls, South Dakota
A tax deduction is a reduction in your taxable income. It results in less of one's income being taxable, which causes a reduced tax liability.
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 Sioux Falls 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 Sioux Falls, South Dakota Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Sioux Falls, South Dakota and run into any type of tax problems, including an audit or wage garnishment, a local tax lawyer would almost certainly be able to help.