Arizona income tax
The Arizona Department of revenue is the responsible authority for the collection of the state income tax. The Arizona income tax is based on the federal tax percentage that is withheld for the specified period.Presently, 10% of the withheld amount if the yearly wages is less than $15,000 and 19% of the withheld amount if the yearly income is equal to or more than $15,000, is the amount to be paid as the state income tax.
Filing requirements: For the filing purposes in Arizona, your gross income is your gross income as per the IRC (Internal Revenue Code) less by the amount that is included in gross income but exempt from Arizona tax.). It is required that if your gross income is equal to or greater than $15,000, you must file an Arizona state income tax return.If you are married and filing jointly, you must do so if your gross income is not less than $11,000.For those who are filing single, as a head of the family, or married and filing separately, the filing threshold is $5,500.
Non-residents and part year residents: For non residents, a tax credit may be allowed by their respective resident state against the taxes that is paid toPat-year residents are taxable for income that they receive while they resided in Arizona. A tax credit however may be allowed if the same income is taxed by Arizona and another state.
Military personnel: Income earned while on active duty is not taxed anymore in Arizona. The amount according top the specified limits under the Arizona revenue department may be deducted by the military authorities from the income received by the personnel while on active duty, which also include the operations performed in the combat zone. Compensations received as member of U.S military for the active military service are not subjected to Arizona income tax.
Married taxpayers: Arizona being a community property state, couples who file separately should estimate the amount of income that is to be reported as per the community property laws.According to the law, the return should reveal 50% of the community income earned from all sources, in addition to any other income.
Separate filers should consider the community deductions and credits according to the same rules followed for the community income. In case of a dependant child from community income, either of you may claim him/her.
Due date of filing: For taxpayers who follow the calendar year to file their returns, the due date to do so is the 15th of April, and in the event that it falls on a Saturday or Sunday, the next business day will be the due date of filing the returns.For the taxpayers following the fiscal year, the due date of filing is the 15th day of the fourth month of their fiscal year.
Estimated tax: If you expect your income to exceed the minimum filing requirement amount, you must pay estimated tax. The payment thus made must equal either 90% of the tax for the current year or the full amount that was due the year just before.You may have to face a penalty if you fail to pay the required tax within the stipulated time.
Withholding of taxes: An employer is required to withhold Arizona income tax from the salary of his employee which is earned in return for his services done in Arizona. The withholding is estimated as a percentage of the federal income tax amount that is withheld.All types of earnings that are considered for federal tax purposes are also subject for Arizona income tax as well. Similarly, the earnings that are exempt from federal taxing are also exempt from Arizona taxing.
Generally, Arizona taxes are to be withheld from the wages of all employees who serve in Arizona irrespective of whether they are residents or non residents of the state.The exception to this rule is that non residents who work temporarily for their employer in Arizona are not subject to tax withholding, though they may be required to file a return if they meet the minimum requirements.
Voluntary disclosure program:
This program of the Arizona revenue department is intended towards those taxpayers who have not accomplished their corporate income tax, individual income tax or other tax obligations in Arizona, and who wish to abide by the filing requirements of the state.Generally, the procedure starts with a person representing the company submitting on behalf of the taxpayer without disclosing his identity. The terms and conditions followed will be as per the current norms.
Electronic filing (e-file): E-file is an interactive return filing program of IRS that provides a simple method to file the state and federal returns electronically.In addition to being quick and accurate, it processes the refunds quicker than by any other method.You may avail the service of a tax professional or you can do it on your own PC.An exclusive list of approved service providers and their software packages is provided in the Arizona Department of revenues web site for you to choose from.
Credits:
- Charitable tax credit: This credit is allowed for money donated for a qualified charity.A qualified charitable organization is that which is exempt from federal taxes or a community action agency that receives grant program funds.
- School tax credit: A school tax credit may be claimed for the contributions made towards the fee payment to a public school for supporting extra curricular activities or personal development programs.
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