In Lewistown, Montana, the income tax is a tax imposed on money received (income) during a given set time period. Under federal law, and the laws of most states, income from any source may be taxed. The federal government imposes an income tax on all persons and entities present in the United States. The authority to tax incomes was granted to the federal government in 1913 with the ratification of the 16th Amendment to the Constitution. Before that time, the Supreme Court had found a federal income tax unconstitutional, prompting the passage of the amendment. Of course, individual states, including Montana, were allowed to impose income taxes as they saw fit.
The federal income tax must be paid by everyone in the U.S. However, you must only pay the state income tax of the state you live in. You should talk with a financial adviser or tax Lawyer in Lewistown, Montana if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Lewistown, Montana
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a reduced tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you received a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would lower your tax liability from to .
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 reduced tax burden than a tax reduction of the same amount.
Many common expenses in Lewistown 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 Lewistown, Montana Tax Attorney Help?
Income tax laws are notoriously complex. If you reside in Lewistown, Montana 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.