The income tax in Madison, South Dakota is a tax imposed on all money earned and received during the year. Under federal law, income from any source can be taxed. The federal government has had explicit constitutional power to impose an income tax since 1916, with the passage of the 16th Amendment. This came after the Supreme Court had repeatedly found a federal income tax to be unconstitutional. States, including South Dakota, have always been free to impose whatever type of income tax they liked.

While the federal income tax applies to everybody in the United States, the income taxes imposed by individual states vary widely, and some states have no income tax at all. You should consult with a Madison, South Dakota tax Attorney or accountant to find out if your state is one of them.

Income Tax Deductions in Madison, South 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 a reduction of a person's tax bill. A tax credit almost always results in a lower tax burden than a tax deduction of the same amount.

Lots of expenses that are common in Madison are tax deductible. Federal tax deductions include mortgage interest, union dues, interest paid on mortgages, and others.

How Can A Madison, South Dakota Tax Attorney Help?

Income tax laws are notoriously complex. If you live in Madison, South Dakota and run into any type of tax problems, including an audit or wage garnishment, a local tax Attorney would almost certainly be able to help.