What is State Income Tax?

What is State Income Tax?
asked Dec 17, 2012 in Personal Taxes by answernest

1 Answer

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With the exception of seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming) every other state imposes income taxes. State income tax is sometimes referred to as personal income tax and is a tax which is levied by each individual state.
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Using your federal adjusted gross income or your taxable income as a starting point, the State deducts a portion of what you pay to the IRS. State income tax is on top of the federal income tax and payroll taxes. Payroll taxes are usually considered as contributions to your Social Security and Medicare plans.

When preparing your tax returns each year, remember there are some state and local taxes, depending on which state you live in), that can be used as a deduction which may save you some money on your federal tax return. (This is, of course, only if you’re a taxpayer whose deductions total more than the standard deduction.) If you have any tax questions or concerns you should contact your tax attorney or accountant.

answered Dec 17, 2012 by answernest