In Bethesda, Maryland, income tax is imposed on most sources of income that a person receives in a certain year. Under federal, state, and most local laws income from all sources may be taxed. The federal government has had the constitutional authority 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 Maryland.
While the federal income tax applies to everyone 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 Bethesda, Maryland tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Bethesda, Maryland
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you received a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would lower your tax liability from to .
This should not be conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.
Many expenses in Bethesda are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
How Can A Bethesda, Maryland Tax Attorney Help?
Income tax law can get fairly complex in Bethesda, Maryland. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.