What is the Difference Between State Taxes and Federal Taxes?
If you live in the United States, you technically have to pay taxes twice. You pay your federal taxes to the US government via the Internal Revenue Service (IRS) and you pay your state taxes to the Department of Revenue in the state where you work. Federal tax laws are the same for all US citizens while state tax laws vary from state to state, so it is important to be sure that you are aware of specific rules and regulations in your state. The types and rates of taxes owed to the federal government may be different from the types of taxes owed to your individual state.
Everyone is required by the federal government to pay federal income taxes and the vast majority of people are also required to pay state income taxes. Individuals in seven states — Florida, Alaska, Nevada, Texas, Washington, Wyoming, and South Dakota are not required to pay state income taxes. The two states with the highest tax rates are Hawaii and Oregon – each assessing their residents 11% in state income taxes. The other 41 states fall somewhere in between. As you can see, each state has a lot of latitude for setting their own tax laws.
Both federal taxes and state taxes are generally due to their respective locations by April 15th each year. You can receive penalties from either the IRS (for federal taxes) or your state agency (for state taxes) if you do not pay by the required deadlines. And, just because you pay one set of taxes on time (for example, if you pay your federal taxes but not your state taxes by April 15th), you will still be penalized by the other agency if you are late. Let a professional tax firm help you interpret federal and state tax law.
In order to be sure that you fully understand and follow all federal and state tax laws, you may want to consider hiring a tax firm for help. Then, instead of having to sort out how to interpret your specific state tax law (in addition to federal tax laws), you can entrust this process to a professional.
Success Tax Relief is a full service tax firm that specializes in a wide variety of tax support services including routine tax preparation for customers in all 50 states, audit preparation and representation, settle back taxes, negotiate with the IRS for offer in compromise, installment agreements and other complicated settlements.
Contact Success Tax Relief Today!
Success Tax Relief has more than 30 years of experience providing strong customer service, high quality representation and affordable prices to our valuable customers. Our success as a company is built on developing and maintaining relationships with our customers that helps us provide the strongest possible representation. If you would like some assistance or advice with your taxes this year, give us a call today at 1-877-958-6638. We are certified by the Better Business Bureau, and can provide you with a free, professional tax consultation that can help you determine the best next steps to solving your tax questions – big or small.