In Cape Elizabeth, Maine, 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 Maine.
Everyone 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 live. Some states have no income tax at all. You should speak with an accountant or tax Lawyer in Cape Elizabeth, Maine if you don't know what the tax system is here.
Income Tax Deductions in Cape Elizabeth, Maine
A tax deduction is a reduction in one's 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 confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a reduced tax burden than a tax reduction of the same amount.
Many common expenses in Cape Elizabeth can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable contributions, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Cape Elizabeth, Maine Tax Attorney Help?
Income tax laws can get quite complex, particularly when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Cape Elizabeth, Maine tax Lawyer to avoid the consequences of under-paying, and to prevent you from over-paying.