The income tax in Farmington, Utah 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 Utah were free to impose an income tax if they saw fit.
Everybody 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 reside. Some states have no income tax at all. You should speak with an accountant or tax Attorney in Farmington, Utah if you don't know what the tax system is here.
Income Tax Deductions in Farmington, Utah
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 deduction 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 typically reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Farmington are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Farmington, Utah Tax Attorney Help?
Income tax law can get fairly complex in Farmington, Utah. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Attorney sooner, rather than later.