In Madison Heights, 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 the constitutional authority to tax income thanks to the 16th Amendment, which was enacted in 1916. Before that time, the U.S. Supreme Court had consistently declared the federal income tax unconstitutional, but individual states, including Michigan were allowed to impose an income tax if they saw fit.
While the federal income tax applies to everyone 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 Madison Heights, Michigan tax Lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Madison Heights, 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 simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax reduction of the same amount.
Many common expenses in Madison Heights can be deducted from your taxable income. They include mortgage interest, charitable contributions (if property documented, of course), the price of tax advice, union dues, and many others.
How Can A Madison Heights, Michigan Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Madison Heights, 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.