Tax Break: The TurboTax Blog » state tax

Nicotine Nation: Which States Import the Most Cigarettes Illegally [Infographic]

joshritchie — Fri, 15 Mar 2013 08:04:59 +0000

With the variation in state cigarette taxes across the United States, incentives to smuggle cigarettes into high tax states is on the rise. Our infographic looks at the variations of state cigarette taxes and the top illegal importing states.

Infographic by Column Five Media

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Affiliate Tax: The Affects On Interstate E-Commerce

joshritchie — Mon, 26 Sep 2011 19:00:22 +0000

A growing number of states are considering introducing and enacting out-of-state online seller tax laws known as affiliate taxes. Seven states have already enacted these laws and more are considering them. We take a closer look at what an affiliate tax means for your state and how it will affect you as an online merchant or affiliate marketer. Will you be affected?

Interactive by joshritchie

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What are State Income Taxes?

TurboTaxBlogTeam — Tue, 04 Jan 2011 18:53:37 +0000

Unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, chances are you are aware of state income taxes. Much like how the federal government collects a federal income tax on your wages and other income, local and state governments levy a similar, though smaller, state income tax on your wages and other income. Those who happen to live in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming are lucky because those states don’t have an income tax. New Hampshire and Tennessee only levy an tax on dividend and interest income.

In many states, the income tax works just like at the federal level with different tiers and different marginal rates. Only seven states levy a flat rate (Colorado, Illinois, Indiana, Massachusetts, Michigan, Pennsylvania, Utah), most prefer a graduated scale. In my home state of Maryland, the tiers are (for single filers):

2.00% for $0 to $1,000
3.00% for $1,000 to $2,000
4.00% for $2,000 to $3,000
4.75% for $3,000 to $150,000
5.00% for $150,000 to $300,000
5.25% for $300,000 to $500,000
5.50% for $500,000 to $1,000,000
6.25% for $1,000,000+

State income taxes are important because if you live in a state with high state income taxes, you may want to consider investments in municipal bonds. Municipal bonds are a special class of investments whose interest is exempt from state and local taxes in the issuing jurisdiction. Munis, as they’re called, are issued by a state or local government to raise money and the tax break is an incentive for investors.

State income taxes are tax deductible on your federal income tax return if you itemize your deductions on a Schedule A. State income taxes fall into the category of deductible nonbusiness taxes, like personal property taxes you pay if you own your own home. For most taxpayers, you won’t need to worry about this when you file your taxes because the state income taxes you’ve paid will be reflected on your W-2. For those who make estimated payments, it’s important that you keep track of those payments so you can claim the proper amount in state income taxes paid.

America’s Most Bizarre Taxes

joshritchie — Mon, 03 Jan 2011 19:28:54 +0000

Ask anybody about taxes, and you’re sure to get an earful. Some think we are taxed too much, while others believe we are not taxed enough. The one thing that is safe to assume, is that there are a number of taxes in America (typically unique to just one State) that tend to be on the weirder side. From pets to bagels, to candy to crack, here’s a look at some of America’s slightly bizarre taxes:

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