Federal taxes and the IRS are enough to worry about -- but most Americans must also remember to pay state taxes.
There are exceptions. Taxpayers who live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don’t need to worry -- because those states don’t levy a personal income tax. Everyone else does.
Despite that, there is a bit of relief. A dozen states cut their income tax rates for 2023, meaning you get to keep more of your money. Only a couple raised income tax rates.
If a state has an income tax, there are two scenarios in which you must file a return:
Who pays the most and least?Taxes 2020: These are the states with the highest and lowest taxes
Yes.
“States are similar to the IRS and have mechanisms to audit taxpayers,” Rios said.
Since states have different rules, it’s important to know what they are in the state you’re filing in. Misreporting data, math mistakes, incomplete state tax forms, excessive deductions, and failing to file your state tax return at all or on time are common audit triggers, experts say.
A state audit works similarly to an IRS audit. Usually, states will contact you by mail notifying you of an audit and ask you for more information with instructions on how to proceed.
Not necessarily, but it’s possible because your state’s tax department likely communicates with the IRS and some of the information on both returns is the same.
Most states generally follow federal guidelines, which would be April 15. However, you should double check with the state because they can differ for various reasons such as disasters.
If your state doesn’t have an income tax, there is no deadline.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
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