In Davison, 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 Davison, Michigan if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Davison, Michigan
A tax deduction is a reduction in your taxable income. For example, if a person makes ,000 per year, and receives a ,000 tax deduction, they will only have to pay taxes on the remaining ,000.
This should not be confused with a tax credit, which is a reduction of a person's tax bill. A tax credit almost always results in a lower tax burden than a tax deduction of the same amount.
Lots of expenses that are common in Davison are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Davison, Michigan Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Davison, Michigan tax attorney to avoid the consequences of under-paying, and to prevent you from over-paying.