The income tax in Davidson County, Tennessee 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 Tennessee, have always been free 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 relatively high income taxes, and a few have none at all. You should consult with a Davidson County, Tennessee tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Davidson County, Tennessee
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit typically reduces your tax bill more than a deduction of the same amount.
Many expenses in Davidson County are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Davidson County, Tennessee Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Davidson County, Tennessee and have any questions about your taxes, you should consult with an accountant or local tax attorney to avoid tax problems, such as audit or wage garnishment.