In Oakland, 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 Oakland, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Oakland, 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 usually reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Oakland 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 Oakland, Maine Tax Attorney Help?
Income tax law can get fairly complex in Oakland, Maine. If you have any questions about your income tax liability, you should not hesitate to speak with a tax attorney sooner, rather than later.