The income tax in Chattanooga, Tennessee 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 Tennessee, have always been allowed to impose whatever type of income tax they liked.
While the federal government levies an income tax against every person and corporation in the U.S., the income taxes imposed by the states vary widely. Some states have fairly high income taxes, and a few have none at all. You should consult with a Chattanooga, Tennessee tax lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Chattanooga, Tennessee
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.
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a reduction of the same amount.
Many common expenses in Chattanooga 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 Chattanooga, Tennessee Tax Attorney Help?
Income tax laws in Chattanooga, Tennessee can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.