In Gibraltar, 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 the constitutional power to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had repeatedly declared the federal income tax unconstitutional, but individual states, including Michigan were free to impose an income tax if they saw fit.
While the federal income tax applies to everybody in the United States, the income taxes imposed by individual states vary widely, and some states have no income tax at all. You should consult with a Gibraltar, Michigan tax attorney or accountant to find out if your state is one of them.
Income Tax Deductions in Gibraltar, 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.
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.
Many common expenses in Gibraltar 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 Gibraltar, Michigan Tax Attorney Help?
Income tax laws can get pretty complex. If you are in Gibraltar, Michigan and have any questions about your taxes, you should consult with an accountant or local tax attorney to avoid tax problems, such as audit or wage garnishment.