The income tax in Farragut, 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 Farragut, Tennessee tax Attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Farragut, Tennessee
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.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit usually results in a greater reduction in tax liability than a deduction in the same amount.
Under federal law, many expenses in Farragut 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 Farragut, Tennessee 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 Farragut, Tennessee tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.