The income tax in Denison, Texas 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 Texas, have always been free to impose whatever type of income tax they liked.
The federal income tax must be paid by everybody 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 attorney in Denison, Texas if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Denison, Texas
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.
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.
Lots of expenses that are common in Denison are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Denison, Texas Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Denison, Texas and have any questions about your taxes, you should consult with an accountant or local tax attorney to avoid tax problems, such as audit or wage garnishment.