The income tax in Chesapeake, Virginia is a tax imposed on all of the income earned or received by a person or corporation during a certain year. Under federal law, almost any type of income may be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The authority to tax incomes was granted to the federal government in 1913 with the ratification of the 16th Amendment to the Constitution. Before that time, the Supreme Court had found a federal income tax unconstitutional, prompting the passage of the amendment. Of course, individual states, including Virginia, were allowed to impose income taxes as 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 Chesapeake, Virginia tax lawyer if you don't know what type of tax system your state has.
Income Tax Deductions in Chesapeake, Virginia
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.
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 Chesapeake 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 Chesapeake, Virginia Tax Attorney Help?
Income tax law can get fairly complex in Chesapeake, Virginia. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.