In Waldoboro, Maine, income tax is imposed on most sources of income that a person receives in a certain year. Under federal, state, and most local laws income from all sources may be taxed. The federal government has had the constitutional authority 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 everyone 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 lawyer in Waldoboro, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Waldoboro, Maine
A tax deduction is simply a reduction in the part of a person's income that 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 your tax bill. A tax credit normally results in a greater reduction in tax liability than a reduction in the same amount.
Lots of expenses that are common in Waldoboro are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Waldoboro, Maine Tax Attorney Help?
Income tax law can get fairly complex in Waldoboro, Maine. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.