The income tax in Forest Hills, 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 Forest Hills, Tennessee tax lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Forest Hills, 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 reduction 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 your tax bill. A tax credit normally results in a greater reduction in tax liability than a reduction in the same amount.
Many expenses in Forest Hills are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
How Can A Forest Hills, Tennessee Tax Attorney Help?
Income tax law can get fairly complex in Forest Hills, Tennessee. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.