State Tax Law

Every year, millions of Americans prepare their own state tax returns. To accurately prepare a state income tax return, you need to have a W-2 or 1099 MISC form. There might be a delay in the refund when you do not include your W-2 or 1099 MISC form when you submit the tax return. Before filing state income tax return, you should be aware of your tax deductions. You may want to take the assistance of a professional tax preparer in order to claim tax deductions.

tax consultants

Getting an Extension on Tax Filing

If you are unable to pay the amount of taxes owed on your state tax returns, you have the option of filing an extension on the deadline. According to state tax law, the IRS can impose penalties and late fees on tax payments if there is a delay on your part. Do not ignore the notices of Internal Revenue Service because it can cost you dearly.

As many state governments in US modify their tax laws on a regular basis, it is quite important that you keep a keen eye on all the latest legal happenings in your state. You can easily do this by checking the website of the state tax department that is updated all the time. If you are interested in moving to another state after retirement, it is advisable that you analyze the tax issues of that particular state first. As the income of retired individuals is typically fixed, any increase in state tax can have an impact on their lifestyle.

Other Taxes

All US states except Montanan, Oregon, Alaska, New Hampshire and Delaware collect sales taxes. The majority of US states follow a single rate. However, there are a few states that also impose local city and county tax rates. US states with a single rate are:

• Connecticut
• Hawaii
• Indiana
• Kentucky
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• New Jersey
• Rhode Island
• Vermont
• Virginia

Every state in the US collects excise taxes on diesel fuel and gasoline. Nine US states have given a permission to counties and cities to impose a local tax on fuel. Taxes in a number of states vary on the basis of wholesale price, which is modified on a quarterly basis. Property taxes are not imposed by states; that is done by the local governments. The role of the state is limited to setting the market value of the property.