The income tax in Plano, 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 Plano, Texas tax Attorney if you don't know what type of tax system your state has.
Income Tax Deductions in Plano, 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.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a deduction of the same amount.
Many expenses in Plano are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Plano, Texas Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Plano, Texas and run into any type of tax problems, including an audit or wage garnishment, a local tax Attorney would almost certainly be able to help.