In Dearborn, Michigan, 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 Michigan.
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 Dearborn, Michigan if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Dearborn, Michigan
A tax deduction is a reduction in one's 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 reduced tax burden than a tax reduction of the same amount.
Lots of expenses that are common in Dearborn are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Dearborn, Michigan Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Dearborn, Michigan and run into any type of tax problems, including an audit or wage garnishment, a local tax lawyer would almost certainly be able to help.