The income tax in Bay City, Texas 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 Texas, have always been allowed to impose whatever type of income tax they liked.
The federal income tax must be paid by everyone in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax Lawyer in Bay City, Texas if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Bay City, Texas
A tax deduction is a reduction in one's taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a reduction of the same amount.
Many common expenses in Bay City can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
How Can A Bay City, Texas Tax Attorney Help?
Income tax law can get fairly complex in Bay City, Texas. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Lawyer sooner, rather than later.