Even though tax season has just passed, it’s never too early to prepare for the next tax season. Part of preparing your taxes is knowing what type of taxes need to be filed. In most cases, the IRS requires that federal income taxes be filed. But what about state taxes? That’s where things get a little bit tricky. Each state has its own rules when it comes to taxpayers filing taxes. So, how do you know if you need to file state taxes? We will provide you with some information and advice about whether you have to file state taxes.
When do I have to file state taxes?
Before knowing when you have to file state taxes, it’s important to know if you even need to file state taxes at all. Again, all states are different, but these are some situations where you will probably have to file state taxes.
- Having income over a certain minimum amount: Some states have a minimum amount of income that taxpayers have to meet to file state taxes. For example, if you are single filing individually and live in Illinois and made at least $2,425, you must file a state income tax return. Another example: If you live in Missouri and earned at least $1,200 as an individual, you have to file a state income tax return.
- Filing a federal income tax return: Many states make taxpayers file a state tax return if they filed a federal tax return.
- Claiming credits: You might be able to claim some refundable credits from your state. To claim these credits, you would have to file a state tax return.
- Getting a tax refund: If you had more state income tax money taken from your paychecks than you actually owe, you may be able to get a tax refund. To get the refund, you must file a state tax return.
Do you need to file state taxes if you don’t live there?
In some cases, yes. Most of these involve activity between different states. For example, if you live in one state and work in another, or if you moved during the tax year.
- Moved from one state to another: If you moved out of one state and into another during the tax year, you may owe state income taxes in both states. And that would mean you have to file a state tax return for both states. Every state has different rules, however. Be sure to check with your state’s tax office to see if you do need to file state taxes if you moved during the tax year. You can find each state’s government and tax information page here.
- Worked in one state while living in another: If you lived in one state but worked in a different state during the tax year, you may need to file two separate state tax returns. But this does not mean that you are taxed twice. Some states offer what is called state income tax reciprocity. This allows you not to file state income taxes for the state where you work. If you do pay income taxes to the state where you work, you may be able to get a credit for those taxes when you file your tax return.
- State-based income sources: If you earn income in a state–even if you don’t live or work there–you may have to file a state tax return for that state. Examples that fall under this category include any rental income or real estate investments located in a different state. State lottery and gambling winnings also fall into this bucket, as does the money you earn from the sale of property in another state.
Which states don’t have income tax?
Only nine of the 50 United States do not have income tax. If you’re lucky enough to live in one of these states, you do not have to file a state tax return for that state. These states are:
The bottom line
Whether you need to file state income taxes depends mostly on where you live. If you live in one of the seven states that don’t have income tax, you get a bit of a break during tax season. Why? Because you’ll most likely need to worry only about filing your federal income taxes. If you don’t live in one of those states, you will probably have to file a state tax return along with your federal taxes. It’s important to remember–all states have different laws, regulations, and guidelines when it comes to taxpayers filing their state income taxes. Be sure to check with your state so you know you’re following the tax laws.
Sun Loan is always here for your tax needs. With more than 20 years of tax experience, the tax preparation experts at your local Sun Loan branch will make sure your taxes are filed correctly. They’ll also look to get you the biggest refund possible. Sun Loan offers three convenient ways to take care of your taxes–both state and federal.
- Online document upload: Just drop by your local branch or give us a call to receive your personalized and secure document upload link. Then click on your personalized link to login and upload scans or photos of your tax documents. Next, review your file for accuracy. Then just e-sign your tax return from home–we’ll handle the filing!
- In person: Visit your local branch with all of your necessary tax documents. Review and sign your tax return, and then we’ll e-file your tax return digitally.
- Drop-off: Get your tax documents together and bring them to your nearest Sun Loan branch. We’ll take it from there! When we’re done preparing your tax return, you can simply review and e-sign from home. We’ll then e-file your tax return, and you can pick up your documents from your local branch at your convenience.
Trust Sun Loan to file your taxes securely, accurately, and on time. For more information, call (800) SUN-LOAN today or visit us online.