The income tax in Lake Forest Park, 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 United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Lake Forest Park, Washington if you aren't clear about what system your state has.
Income Tax Deductions in Lake Forest Park, Washington
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 normally reduce your tax liability far more than a tax deduction of the same amount.
Many common expenses in Lake Forest Park can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
How Can A Lake Forest Park, Washington Tax Attorney Help?
Income tax law can get fairly complex in Lake Forest Park, Washington. If you have any questions about your income tax liability, you should not hesitate to speak with a tax Attorney sooner, rather than later.