The income tax in Bainbridge Island, Washington is a tax imposed on all of the income earned or received by a person or corporation during a given year. Under federal law, almost any type of income can be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The power 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 Washington, were free to impose income taxes as 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 Bainbridge Island, Washington if you don't know what the tax system is here.

Income Tax Deductions in Bainbridge Island, Washington

A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .

This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit normally results in a greater reduction in tax liability than a deduction in the same amount.

Lots of expenses that are common in Bainbridge Island are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A Bainbridge Island, Washington Tax Attorney Help?

Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Bainbridge Island, Washington tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.