The income tax in Odessa, 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 the constitutional authority to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had consistently declared the federal income tax unconstitutional, but individual states, including Texas were allowed to impose an income tax if they saw fit.
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 an Odessa, Texas tax lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Odessa, Texas
A tax deduction is an expense which, in whole or in part, is subtracted from a person's taxable income. For example, if you make ,000 in a year, and the tax rate is 10%, a reduction of ,000 results in only ,000 being taxed. This means that you will pay ,900 instead of ,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 reduced tax bill than a reduction of the same amount.
Many common expenses in Odessa can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Odessa, Texas Tax Attorney Help?
Income tax laws can get very complex. If you are in Odessa, Texas and have any questions about your taxes, you should consult with an accountant or local tax lawyer to avoid tax problems, such as audit or wage garnishment.