In Somerset, Massachusetts, 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 has had the constitutional power to impose an income tax since 1916, since the passage of the 16th Amendment. Before then, states could, and still can, impose whatever income tax they like, including in Massachusetts.
While the federal income tax applies to everybody in the United States, the income taxes imposed by individual states vary widely, and some states have no income tax at all. You should consult with a Somerset, Massachusetts tax Attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Somerset, Massachusetts
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 typically results in a greater reduction in tax liability than a deduction in the same amount.
Many common expenses in Somerset 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 Somerset, Massachusetts Tax Attorney Help?
Income tax laws in Somerset, Massachusetts can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.