The income tax in Cedar Park, 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 Cedar Park, Texas if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Cedar Park, Texas
A tax deduction is simply a reduction in the part of a person's income that 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 lowers your tax bill by the amount of the credit. A tax credit usually reduces your tax bill more than a reduction of the same amount.
Many expenses in Cedar Park are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
How Can A Cedar Park, Texas Tax Attorney Help?
Income tax law can get fairly complex in Cedar Park, 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.