Filing Your Taxes: Federal and Virginia
It’s that time of year. When that sentence is used in November or December, it means that the holidays are approaching. In February, March, or April, it can mean that it is tax season. The overachievers among us are already filing – or have filed – their taxes. For the procrastinators, there is still so much time left until that work has to be done. For everyone in between, there is this blog post to help you make sure you are on the right track with your 2016 income taxes.
What to File:
When you file your income taxes, there are at least two types of taxes you are paying: federal and state income taxes. The amount of tax you pay is based on your taxable income. Generally speaking, this means that the more money you made last year, the more tax you owe. The opposite is true, too. Taxable income is the income that can be taxed – what is left over after all of your deductions and credits are applied.
The Virginia Department of Taxation has published a chart that shows how much tax you owe. If your taxable income is between $0 and $3,000, that income amount is taxed at a 2% rate. The highest tax rate is for those with a taxable income over $17,000. The income tax amount at that rate is $720 + 5.75% for every dollar over $17,000. There are also levels in between.
When to File:
The date that everyone knows is April 15. That is when federal tax returns must be filed, unless the 15th falls on a weekend. The date for your Virginia tax return, however, is different. That date is May 1. Most tax products that help citizens file take care of both of their tax returns at the same time, so the varying deadlines are not a big deal.
How to File:
There are many ways to file. While this website does not plan to promote one company over another, there is an opportunity that you may want to consider. The Commonwealth has provided some ways for qualified citizens to file their taxes for free.
The Department of Taxation has multiple “free file” options for citizens at certain income levels. While most options are for active duty military, there are a few for civilian citizens as well. Everyone should check this out before proceeding further with their taxes.
Why to File:
If you owe Virginia income tax, there is a penalty for not filing your taxes by the due date of May 1. The penalty is 6% per month. This will increase each month you file late until you reach the maximum penalty of 30%.
Technically, if you are someone who is going to receive a refund instead of having to pay, there is no deadline. You still need to file, however, and it is a good idea to do it on time.
Federally, it is illegal not to file and pay your taxes. The term you often hear in reference to this is tax evasion. According to the IRS, tax evasion is a felony that can result in a prison sentence of up to 5 years and a fine of no more than $250,000.
While tax issues require a tax professional, it is important to remember that legal issues require a lawyer. Charges for crimes cover a variety of issues; one of them is financial. If you need legal assistance for financial crimes, call or e-mail today for a free consultation!
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