In Battle Creek, Michigan, 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 Michigan.
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 Battle Creek, Michigan if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Battle Creek, Michigan
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.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit typically reduces your tax bill more than a deduction of the same amount.
Many common expenses in Battle Creek 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 Battle Creek, Michigan Tax Attorney Help?
Income tax laws in Battle Creek, Michigan can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.