The income tax in Madisonville, 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 Madisonville, Tennessee tax lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Madisonville, 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.
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a reduced tax burden than a tax reduction of the same amount.
Lots of expenses that are common in Madisonville are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Madisonville, Tennessee Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Madisonville, Tennessee tax lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.