In Topsham, 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 Topsham, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Topsham, Maine
A tax deduction is simply a reduction in the portion of a person's income which is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.
This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit usually results in a greater reduction in tax liability than a deduction in the same amount.
Many common expenses in Topsham can be deducted, in whole or in part, from your taxable income. Federal tax deductions include charitable donations, union dues, interest paid on a mortgage, and state and local taxes.
How Can A Topsham, Maine Tax Attorney Help?
Income tax laws in Topsham, Maine can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.