In Rochester, 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 Rochester, Michigan tax lawyer or accountant to find out if your state is one of them.
Income Tax Deductions in Rochester, 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 conflated with a tax credit, which is a reduction in your tax bill. A tax credit typically results in a greater reduction in tax liability than a reduction in the same amount.
Lots of expenses that are common in Rochester are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.
How Can A Rochester, Michigan Tax Attorney Help?
Income tax law can get fairly complex in Rochester, Michigan. If you have any questions about your income tax liability, you should not hesitate to speak with a tax lawyer sooner, rather than later.