Understanding the Elements of Texas Income Tax
The Texas Income tax laws, although unique in some aspects are significantly similar to other States Tax Laws. Many people in Texas struggle in keeping up with IRS Income tax requirements. There are various avenues that one can take to deal with this problem with the two popular ones being either tackling it yourself or enlisting the help of a professional tax expert. The latter is more expensive and as such is dependent on the depth of ones pockets. This article aims to give you pointers that will prove useful when dealing with Texas Income Tax.
The first rule of thumb is to give the IRS the required information and nothing more. Often the IRS may require for you to provide proof of certain information concerning income or deductions, you should avoid volunteering or giving more information than required. Giving excess information may give the impression that you owe the IRS more money than is actually stated.
The second aspect that is important is to avoid directly lying, falsifying or omitting certain information as this may prove consequential. The IRS is a body that has spread its wings all over every government department and thus can gain access to any information it wishes to have, lying to them is futile and can only worsen the situation. Attempts of lying may create suspicion into your case.
Although Texas along with states like Dakota, Alaska, Wyoming, Nevada, Washington, and Florida have no exclusive State Income Tax Laws, they borrow heavily from the Federal Income tax laws. These include aspects such as; tax withholding, where the employer is legally obligated to deduct Federal Income Tax from the employees pay cheque in addition to Medicare and social security, which are under the umbrella FICA contributions and constitutes around eight percent of one’s total income. Federal income tax laws also require the employer to contribute the same amount of FICA as the employee. The tax form that documents this is form W2 (Wage and Tax statement).
Texas Income tax allows for deductions which can take the form of itemized or standardized deductions with the former deducting a flat rate for each individual depending on the tax filing status and their net taxable income, the former is particularly preferable to individuals who have considerable number of deductible items and as such they gain from itemizing them. It however should be noted that in rare circumstances where the deductions are more than the tax liability, the tax s simply put at zero and one should not expect any payment from the IRS.
From the above it is clear that even though there is no State law on Texas Income tax, it still is an important aspect that is appropriately covered by the relevant federal tax provisions.
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