In Lakeville, 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 Lakeville, Minnesota if you don't know what the tax system is here.
Income Tax Deductions in Lakeville, 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.
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 Lakeville 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 Lakeville, Minnesota Tax Attorney Help?
Income tax laws are notoriously complex. If you live in Lakeville, 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.