In Madawaska, Maine, 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 Maine.
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 Madawaska, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Madawaska, Maine
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.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit normally reduces your tax bill more than a deduction of the same amount.
Under federal law, many expenses in Madawaska are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Madawaska, Maine Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Madawaska, Maine tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.