The income tax in Rockwall, 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 a Rockwall, Texas tax Lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Rockwall, 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.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax reduction of the same amount.
Many common expenses in Rockwall can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
How Can A Rockwall, Texas Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Rockwall, Texas and run into any type of tax problems, including an audit or wage garnishment, a local tax Lawyer would almost certainly be able to help.