In Peterborough, 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 Peterborough, New Hampshire if you are not clear about what your state and federal tax liability.

Income Tax Deductions in Peterborough, New Hampshire

A tax deduction is simply a reduction in the portion of a person's income which is taxable. For example, if someone makes ,000 per year, and gets a ,000 tax deduction, their taxable income is ,000.

This should not be conflated with a tax credit, which is a reduction in one's tax bill. A tax credit typically results in a greater reduction in tax liability than a deduction in the same amount.

Many common expenses in Peterborough 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 Peterborough, New Hampshire Tax Attorney Help?

Income tax laws in Peterborough, New Hampshire can get fairly complex. You should speak with an accountant or tax lawyer if you have any questions about your income tax liability.