The income tax in Knoxville, 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 Knoxville, Tennessee tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Knoxville, Tennessee
A tax deduction is simply a reduction in the portion of a person's income which is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
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 normally reduces your tax bill more than a deduction of the same amount.
Many expenses in Knoxville are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Knoxville, Tennessee Tax Attorney Help?
Income tax laws in Knoxville, Tennessee can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.