In West Fargo, North Dakota, the income tax is a tax imposed on money received (income) during a certain set time period. Under federal law, and the laws of most states, income from any source can be taxed. The federal government has the power to impose an income tax thanks to the 16th Amendment to the U.S. Constitution, enacted in 1916 after the Supreme Court had, on more than one occasion, found a federal income tax to be unconstitutional. Of course, before and after the creation of the federal income tax, states, including North Dakota were free to impose income taxes of their own.
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 West Fargo, North Dakota if you aren't clear about what system your state has.
Income Tax Deductions in West Fargo, North Dakota
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 simply a reduction in somebody's tax bill. A tax credit will usually reduce your tax liability far more than a tax deduction of the same amount.
Many common expenses in West Fargo 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 West Fargo, North Dakota Tax Attorney Help?
Income tax laws in West Fargo, North Dakota can get fairly complex. You should speak with an accountant or tax Lawyer if you have any questions about your income tax liability.