The income tax in Pecos, 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 the constitutional power to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had repeatedly declared the federal income tax unconstitutional, but individual states, including Texas were free 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 relatively high income taxes, and a few have none at all. You should consult with a Pecos, Texas tax attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Pecos, 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 Pecos are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Pecos, Texas Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Pecos, Texas tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.