In North Berwick, 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 North Berwick, Maine if you are not clear about what your state and federal tax liability.

Income Tax Deductions in North Berwick, Maine

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.

There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.

Lots of expenses that are common in North Berwick are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A North Berwick, 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 North Berwick, Maine tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.