The income tax in The Colony, 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.
Everyone in the U.S. is subject to the federal income tax. But you are only subject to the income tax of the state in which you live. Some states have no income tax at all. You should speak with an accountant or tax Lawyer in The Colony, Texas if you don't know what the tax system is here.
Income Tax Deductions in The Colony, Texas
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you received a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would lower your tax liability from to .
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 The Colony 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 The Colony, Texas Tax Attorney Help?
Income tax law can get fairly complex in The Colony, Texas. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Lawyer sooner, rather than later.