In Woodbury, 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 United States must pay the federal income tax. However, you only have to pay the state income tax of the state in which you reside. You should speak with an accountant or tax lawyer in Woodbury, Minnesota if you aren't clear about what system your state has.
Income Tax Deductions in Woodbury, Minnesota
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 simply a reduction in somebody's tax bill. A tax credit will normally reduce your tax liability far more than a tax deduction of the same amount.
Under federal law, many expenses in Woodbury are tax-deductible, including interest paid on a mortgage, charitable contributions, the cost of tax advice, and union or professional dues, among many others.
How Can A Woodbury, Minnesota Tax Attorney Help?
Income tax laws in Woodbury, Minnesota can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.