The income tax in South Boston, 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.
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 South Boston, Virginia if you don't know what the tax system is here.
Income Tax Deductions in South Boston, Virginia
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 .
Don't confuse a tax deduction with a tax credit. A tax credit simply lowers your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a reduction of the same amount.
Many common expenses in South Boston 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 South Boston, Virginia Tax Attorney Help?
Income tax laws in South Boston, Virginia can get very complex. You should speak with an accountant or tax attorney if you have any questions about your income tax liability.