Thursday, February 11, 2010

Michigan Income Tax Deductions

Michigan offeres various deductions for its state income taxes.


Although the state of Michigan charges taxes on income earned in the state, it does offer various income tax deductions. Michigan income tax deductions lower your adjusted gross income, which could help decrease the amount of state taxes you owe.


Exemption Deductions


You can take a $3,500 personal exemption deduction from your Michigan income taxes. The state also allows a $2,200 exemption for those over age 65 as well as those who are permanently disabled. For Michigan residents who received unemployment payments for more than half of their adjusted gross income, there is a $2,200 deduction.


Dependent Deductions


Michigan tax payers can deduct $600 for each dependent child under the age of 18. The state also allows a $3,500 dependency exemption. You can also take an additional $1,500 in a personal exemption if someone else can claim you as a dependent on his taxes as long as your adjusted gross income is more than $1,500.


Additional Deductions


Michigan residents receiving payment from a private pension can take a maximum deduction of $43,440 from their state income taxes. Senior citizens can deduct up to $9,690 in capital gains income, and dividend and interest payments. Disabled veterans can deduct an additional $250 from their Michigan income taxes. You can take a maximum of a $5,000 if you contribute to a Michigan Education Savings Program.







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