In Hillsborough, New Hampshire, 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 New Hampshire were free to impose income taxes of their own.
The federal income tax must be paid by everybody 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 Attorney in Hillsborough, New Hampshire if you are not clear about what your state and federal tax liability.
Income Tax Deductions in Hillsborough, New Hampshire
A tax deduction is a reduction in the portion of a person's income that is taxable, resulting in a lower tax liability. For example, suppose your income tax rate is 10%, and you had ,000 in income last year. If you got a ,000 tax deduction, your taxable income would be ,000, and you would have to pay 10% on that. So, it would reduce your tax liability from to .
There is also something called a tax credit, which is treated as a partial payment of the income tax. A tax credit almost always results in a lower tax bill than a deduction of the same amount.
Under federal law, many expenses in Hillsborough 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 Hillsborough, New Hampshire Tax Attorney Help?
Income tax laws can get quite complex, especially when large amounts of money from multiple sources are involved. It would not be a bad idea to call a Hillsborough, New Hampshire tax Attorney to avoid the consequences of under-paying, and to prevent you from over-paying.