In Norway, 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 Norway, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Norway, 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.
This should not be confused with a tax credit, which is simply a reduction in somebody's tax bill. A tax credit will typically reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Norway 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 Norway, 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 Norway, Maine tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.