In Alexandria, Minnesota, 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 Minnesota were free to impose an income tax if they saw fit.
Everybody in the U.S. is subject to the federal income tax. But you are only subject to the income tax of the state in which you reside. Some states have no income tax at all. You should speak with an accountant or tax attorney in Alexandria, Minnesota if you don't know what the tax system is here.
Income Tax Deductions in Alexandria, Minnesota
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.
Don't confuse a tax deduction with a tax credit. A tax credit simply reduces your tax bill by the amount of the credit. A tax credit usually reduces your tax bill more than a deduction of the same amount.
Many common expenses in Alexandria can be deducted from your taxable income. They include mortgage interest, charitable donations (if property documented, of course), the cost of tax advice, union dues, and many others.
How Can A Alexandria, Minnesota Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Alexandria, Minnesota and run into any type of tax problems, including an audit or wage garnishment, a local tax attorney would almost certainly be able to help.