In Lake Station, Indiana, income tax is imposed on most sources of income that a person receives in a given year. Under federal, state, and most local laws income from all sources 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 Indiana, were free to impose income taxes as they saw fit.
The federal income tax must be paid by everybody in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax attorney in Lake Station, Indiana if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Lake Station, Indiana
A tax deduction is a reduction in one's taxable income. It results in less of your income being taxable, which causes a lower tax liability.
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a lower tax burden than a tax deduction of the same amount.
Many expenses in Lake Station are tax-deductible, such as interest paid on mortgages, charitable donations, the price of tax advice, and union dues, among others.
How Can A Lake Station, Indiana Tax Attorney Help?
Income tax laws in Lake Station, Indiana can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.