© Copyright khedmeh Wall
Pennsylvania is one of the few states that still collects state income taxes. The Pennsylvania Department of Revenue (DOR) administers and enforces the laws governing state income tax collections. Knowing these laws is essential for any Pennsylvania taxpayer who wants to comply with their tax obligations, as well as maximize deductions and credits available to them. In this article, we will discuss what you need to know about Pennsylvania's income tax laws and also about tax preparation Pennsylvania so that you can properly prepare your taxes each year.
Overview of Pennsylvania’s State Income Tax System
Pennsylvania has a progressive income tax system, which means that the more money you make, the higher percentage of it you must pay in taxes. The current tax rate ranges from 3.07% up to 5.99%. Additionally, there are special rates for capital gains and qualified dividends that range from 0% up to 3.07%.
Income brackets vary depending on filing status: Single filers have different brackets than married couples filing jointly or separately; however, all taxpayers must calculate their taxable income before applying their applicable bracket rate(s). For example, if someone earns $50,000 per year but takes a $2,000 deduction for charitable contributions they made throughout the year then their taxable income would be $48,000 instead of $50,000 when calculating their total taxable income amount subject to taxation at the applicable rate(s).
Exemptions and Deductions Available
In addition to deductions related to charity contributions or other itemized deductions available on federal returns (e.g., mortgage interest payments), there are several exemptions and deductions specifically allowed under Pennsylvania law that can help reduce your overall taxable liability. These include:
• Personal Exemption – This exemption allows for a reduction in your taxable income if you meet certain requirements such as being over 65 years old or having dependents living in your home who are under 18 years old;
• Earned Income Credit – If you qualify based on your family size and earnings level then you may be entitled to an earned-income credit;
• Property Tax/Rent Rebate Program – This program provides eligible taxpayers with rebates on property taxes paid during the prior year;
• Senior Citizens Property Tax/Rent Rebate Program – This program provides eligible senior citizens with rebates on property taxes paid during the prior year;
• Standard Deduction – All taxpayers are entitled to take a standard deduction up to a certain maximum amount which depends on filing status (single filer vs married couple);
• Dependent Care Credit – If you incur expenses related to caring for dependents while working then this credit may be available;
• Elderly & Disabled Credit – You may also qualify for an additional credit if you meet certain qualifications related age or disability status;
• Military Service Credit – Any military personnel serving in active duty outside of PA may receive an additional credit based on days served outside of PA during 2018;
• Non-Resident Military Personnel Exemption - Non-residents who are members of US Armed Forces stationed in PA can exclude part or all their military pay from PA taxation depending upon circumstances
It’s important to note that not everyone qualifies for every exemption or deduction listed above—each situation is unique—so it’s best practice to consult with a qualified tax professional before making any assumptions about what exemptions apply in each particular case. Moreover, even if you don’t think any exemptions apply it doesn’t hurt anything by double checking—you could potentially save yourself some money!
Additional Considerations When Filing Your Taxes
Taxpayers should also consider other factors when preparing their returns such as how much withholding was taken out throughout the course of 2018 and whether they owe back taxes from previous years due when submitting their return this time around (known as “carryover liabilities”). Additionally, understanding how capital gains will affect your overall liability is also important since these types of transactions often involve multiple forms that must be completed correctly before submission (i.e., Form 1099-B). Furthermore it’s always wise practice to keep copies of all paperwork used throughout preparation process just so nothing gets overlooked down line either accidentally or intentionally by anyone else involved including yourself! Finally don't forget about estimated quarterly payments required by some individuals--these typically need filed 4 times per calendar year rather than once annually like normal returns do so make sure those dates aren't missed either!
Conclusion: Understanding Your Obligations Under PADOR Law Is Essential
Filing accurate returns is essential not only because it helps ensure compliance with PADOR law but also because failure do so can lead costly penalties imposed by both federal government agencies like Internal Revenue Service (IRS) as well state ones like PADOR itself--not something anyone wants deal with especially come April 15th when all eyes turn towards deadline looming ahead just days away! With knowledge gained here today hopefully readers now better understand various aspects associated filing return correctly within context specific rules regulations set forth PADOR--good luck everyone getting everything done timely fashion without too much headache along way !
The Wall