In Waterboro, 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 Waterboro, Maine if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Waterboro, 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 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 reduction of the same amount.
Many expenses in Waterboro are tax-deductible, such as interest paid on mortgages, charitable contributions, the cost of tax advice, and union dues, among others.
How Can A Waterboro, Maine Tax Attorney Help?
Income tax law can get fairly complex in Waterboro, 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.