The process of filing taxes is hard for everyone but those people that pay income tax in Pennsylvania can breathe a little easier knowing they owe less in income tax than their Maryland neighbors. Single filers in Pennsylvania pay about 3% in income tax while their neighbors over in Maryland pay about 4½%. Those residents that live in Pennsylvania also pay less in income tax than their neighbors in Delaware, New York and West Virginia. There are six factors that generally go into the makeup of your income tax filing process: the rate within your income bracket, whether the local income taxes are applicable in each of the states, personal exemption per filer, exemption per dependent, the standard deduction amount and whether the state income tax is deducted based on net or gross income after federal filing. If there was ever a time enjoy being a Pennsylvania resident, it’s during the tax season.
What Will They Owe?
The average person that files under single status in Pennsylvania with an average income of $54,000 will pay about $1,600 in state income taxes. Those people that pay taxes in Pennsylvania can’t take personal exemptions, standard deductions, or exemptions for dependents to use toward their state returns. On the flip side, Maryland residents that make the median income of $65,000 will pay about $2,800: almost double what others will pay on income tax in Pennsylvania.
If you’re a retired person that lives in Pennsylvania, you’ll be glad to know that income tax in Pennsylvania doesn’t apply to those on Social Security. Federal taxes don’t get pulled out until the state tax that’s owed has been assessed first. Any other local income taxes might be added in.
Cost of Living in Pennsylvania
Living in Pennsylvania can be a lot more expensive than states that are close by like Ohio. The average price of a home in Pennsylvania is around $115,000 while Ohio residents can look to spend an average of $98,000. You can get on the search for competitive interest rates in Pennsylvania to have the costs reduced, but there are still more expenses that will lie ahead. Pittsburgh has some of the highest transportation costs in the country due to the prices of gas and vehicle maintenance. Boston is the only state that outranks Philadelphia as far as the composite cost of living goes. Although they might have to pay more when it comes to the cost of living, at least they can look forward to lower income tax in Pennsylvania.
Paying taxes is never fun, but nothing tops actually going through with filing taxes. Getting all of the paperwork together and compiling all of the documentation you need can be a real headache. If you live in Philadelphia, getting your taxes done can be much easier. If your family makes less than $52,000 or you make less than $20,000 a year as a single filer, you can find one of 18 CWF filing centers to go to to get low-cost or free tax assistance.
You can also hire a professional to help you get through the process if you’ve got a more complex situation on your hands. If you’re running your own business, you might want to splurge on the help of a CPA or tax professional. You’re probably entitled to more tax deductions than you realize and the only way you’ll find out is if you get the help of an expert. Hiring a CPA will without a doubt cost you money, but you’re likely to save more on your taxes going this route which will allow for more money to flow your way.
Fill out a 1040-EZ. If you had a very uncomplicated working situation for the year and you’ve got no deductions nor business ownership, all you’ll need is your W-2 from your employer and the 1040-EZ form to get your taxes done. You can file these forms online for free, so there’s no hassles or worry involved.
Give Back and Save Big
Before you get ready to file your taxes, you want to make sure you’ve made donations or maximum contributions to your tax-free accounts like an IRA. If you end up owing some money in the end, you might save some if you paid special attention to this area of business. Making a donation to a charity is completely tax deductible, so you should think serious about giving where and when you can. There are a number of worthy causes already out there that need help and it’s not like you’re losing anything at all to give a little. It might be hard to do now, but you’ll be patting yourself on the back once you get that lovely refund check.
Income tax in Pennsylvania is pretty great, but there are even more places around the country with comparable rates.