The income tax in Sun Prairie, Wisconsin 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 has the power to impose an income tax thanks to the 16th Amendment to the U.S. Constitution, enacted in 1916 after the Supreme Court had, on more than one occasion, found a federal income tax to be unconstitutional. Of course, before and after the creation of the federal income tax, states, including Wisconsin were free to impose income taxes of their own.
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 Sun Prairie, Wisconsin if you don't know what the tax system is here.
Income Tax Deductions in Sun Prairie, Wisconsin
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit usually results in a greater reduction in tax liability than a deduction in the same amount.
Many common expenses in Sun Prairie can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Sun Prairie, Wisconsin Tax Attorney Help?
Income tax laws in Sun Prairie, Wisconsin can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.