Thursday, May 19, 2022

How To Pay Virginia State Taxes

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Know Your Virginia Income Tax Exemptions

Virginia – State Withholding Tax Setup

Similar to federal deductions, Virginia gives its residence a chance to exempt costs from their yearly tax return. Exemptions include:YourselfBoth you and your spouse can take a personal exemption of up to $930. Many couples filing jointly choose to file under the Spouse Tax Adjustment in which case each person must exempt themselves.

DependentsYour income tax bill can be adjusted up to $930 for dependents. Note, the number of dependents you claim should be the same as the number listed on your federal tax return.

AgeIf you are 65 or older, you can claim up to $800 on your income taxes. If filing jointly, each person must file their own age exemption.

Blindness

Virginia allows you to exempt $800 for a blindness disability. Again, if filing jointly, each partner must claim their own exemption.

Knowing where you are at with your exemptions will help decrease your income tax bill. Exclusions and exceptions do apply for people who only had Virginia residency for part of the year. More information on that can be found here.

Underpayment Of Estimated Income Tax

An addition to tax is imposed by law if at least 90% of your total tax liability is not paid throughout the year by timely withholding and/or installments of estimated tax except in certain situations. The addition to tax does not apply if each required installment is paid on time and meets one of the following exceptions:

  • Is at least 90% of amount due based on annualized income
  • Is at least 90% of amount due based on the actual taxable income
  • Is based on a tax computed by using your income for the preceding taxable year and the current year’s tax rates and exemptions
  • Is equal to or exceeds the prior year’s tax liability for each installment period and the prior year return was for a full year and reflected an income tax liability or
  • The sum of all installment underpayments for the taxable year is $150 or less

If you do not qualify for an exception, your underpayment computation will be based on 90% of the current year’s income tax liability or 100% of your liability for the preceding year, whichever is less. The addition to tax is computed on Form 760C .

Estimated Tax Payment Options

Use the following options to make estimated tax payments. For more information about filing requirements and how to estimate your taxes, see Individual Estimated Tax Payments.

Online, directly from your bank account
  • Log in to your online services account to schedule all 4 quarterly payments in advance.
  • Dont have an account? Create one now.

Not ready to create an account? Use eForms – make sure to choose the correct voucher number for the payment you’re making.

ACH credit

Pay by ACH credit and initiate sending payments from your bank account to Virginia Tax’s bank account. See our Electronic Payment Guide for details on requirements and set-up with financial institutions, which may include fees.

Pay using a credit or debit card through Paymentus . A service fee is added to each payment you make with your card.

Check or money order

Mail the correct 760ES voucher for the tax period to:

Virginia Department of Taxation

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Overview Of Virginia Retirement Tax Friendliness

Social Security retirement benefits are not taxed in Virginia. Other types of retirement income, such as pension income and retirement account withdrawals, are deductible up to $12,000 for seniors. Property and sales tax rates are low.

To find a financial advisor near you, try our free online matching tool.

Annual Social Security Income
Annual Income from Private PensionDismissAnnual Income from Public PensionDismiss
Your Tax Breakdown
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
  • Our Tax Expert

    Jennifer Mansfield, CPATax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAssets tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

    …read more

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Contribute To A Virginia 529 Savings Plan

» New Analysis: Low

A 529 plan is a savings plan that helps families save for qualified higher education expenses. In a 529 account, your money can grow free from federal taxes and be tax deductible in some situations.Virginia taxpayers enjoy the additional benefit of a state income tax deduction on contributions to their Virginia529 accounts. Families can can deduct up to $4,000 per year per account for 529 plan contributions. What most people dont know, is that its possible to deduct up to 100% of annual Virginia 529 plan contributions. This little known tax benefit is based on a ruling from the Virginia tax commissioner. So, dont be fooled by the $4,000 per account limit.

If youre smart, and I know you are, you can potentially deduct more.In order to be able to deduct more than $4,000 of your contributions, you must establish more than one account. Moreover, each account must differ in one of the following ways. It must have:

  • a different owner, or

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Virginia Median Household Income

2010$60,674

Like most states, Virginia also collects a state income tax. Taxpayers fall into one of four income brackets, depending on income level. The top tax rate of 5.75% applies to taxable income over $17,000, so most taxpayers will be paying that rate on at least some of their income. Virginia’s income tax brackets apply to all residents regardless of filing status.

If you are looking to buy a home in Virginia or if you want to refinance a mortgage on a home you already own, make sure to check out our Virginia mortgage guide for important information on rates and details about getting a mortgage in the Old Dominion.

Total Estimated 2020 Tax Burden

Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2020 – 2021 filing season based on the Trump Tax Plan.

Also Check: How Can I Make Payments For My Taxes

Virginia State Personal Income Tax

Virginia levies a state income tax on all income earners, no matter how low their annual income is. Although there are four income tax brackets, the highest bracket includes everyone earning $17,000 or more. The highest bracket is charged at an income tax rate of 5.75 percent. Keep in mind that this is just the state income tax Virginians have to pay a federal income tax as well.

Heres a look at the Virginia income tax brackets:

Virginia Income Tax Rates
Virginia Sales Tax Rate5.3%

The general sales tax rate in Virginia is 5.3 percent statewide, though it is slightly higher in three areas:

  • Hampton Roads, which includes the cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk and Virginia Beach, and the counties of Isle of Wight and Southampton
  • Northern Virginia, which includes the cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park, and the counties of Arlington, Fairfax, Loudoun and Prince William
  • Historic Triangle, which includes the city of Williamsburg, and the counties of James City and York

Here are the sales tax rates in these areas:

Local Sales Taxes in Virginia
Area
Historic Triangle7%

Read: The Most Tax-Friendly Major Cities in America

Tips For Setting Up Your Payment Plan

What Happens When I Can’t Pay My Virginia State Taxes?
  • Set up the shortest payment agreement you can afford to avoid additional penalties and interest.
  • Use your online services account to be able to manage and review your plan 24/7.
  • Set up automatic payments, and never forget to make a payment.
  • Sign up for email reminders to get updates on your upcoming payments and any new bills.
  • Keep your account information up-to-date, especially your mailing address, to make sure you get any correspondence from us regarding your account.
Online

You must be the primary account holder to view your eligible bills and set up a payment plan online.

Log in to your online services account to get started.

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Overview Of West Virginia Taxes

West Virginia has a progressive income tax. Homeowners in the state pay the ninth-lowest average effective property tax rate in the country. The statewide sales tax rate in West Virginia is 6%, but some cities charge up to an additional 1%.

Household Income
Number of State Personal ExemptionsDismiss

* These are the taxes owed for the 2020 – 2021 filing season.

How Will I Know If I Need To Make An Estimated Payment

If you are required to file a tax return and your Virginia income tax liability, after subtracting income tax withheld and any allowable credits, is expected to be more than $150, then you must make estimated tax payments or have additional income tax withheld throughout the year from your wages or other income.

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State Tax Information For Military Members And Retirees

You may know that military allowances like Basic Allowance for Housing are tax-free. You may also know that most VA benefits are also tax-free.

Did you know that many states do not charge income tax on active duty or retired military pay? Many others tax only a portion of these pays.

To see what type of tax breaks your state offers for military members, retirees and survivors check out our list.

Employer Tax Rate Questions

How Do I Pay My Virginia State Taxes
  • Tax Rate: How are rates assigned?
  • Rates are assigned by calendar year, based on the individual situation of the employer. New Virginia employers receive the initial base tax rate of 2.5% until eligible for a calculated rate. Others may qualify for an experience base rate or receive an assigned base tax rate.
  • Tax Rate: What factors determine my tax rate?
  • Employers receive a Base Tax Rate, dependent on their particular account history and circumstances, plus across-the-board charges that are applied to all employers, such as Pool Costs and Fund Building Charges. Detailed explanations of these tax rate components are below.
  • Base Tax Rate A benefit ratio is obtained by dividing the benefit charges against an account by the state unemployment taxable wages for the last four completed fiscal years. This ratio is then applied to the Trust Fund Balance Factor to create the Base Tax Rate.
  • Pool Cost Charge These charges are applied to all employers to cover benefit costs that cannot be recovered from an individual employer, such as a non-chargeable employer, an employer who has closed, or an employer for which the calculated Base Tax Rate is above the maximum.
  • Fund Building Charge A charge of .2% applied to all employers when the Trust Fund balance is 50%, or less.
  • Tax Rate: What can cause a maximum base tax rate?
  • Foreign Contractor? Out-of-state highway and building construction contractors are assigned the maximum base tax rate of 6.2% for a minimum of 3 calendar years.
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    Review And Manage Your Payment Plan Online

    You can view details of your existing payment plan and make changes to your plan through your online services account.

    How to make changes to your payment plan?

    Just log into your account, navigate to your payment plan and choose “Edit” next to the information you want to change. If you set up your payment plan over the phone, you can still review and make changes to your payment plan through your online services account:

    How Do I Pay Virginia State Tax

    You will choose your state payment method during the filing stage of your return. However, the Virginia Department of Revenue offers two payment methods.

  • Make a return payment through Official Payments Corporation. A convenience fee is added to each payment you make with your card.
  • Check or money order If you choose this option then you will mail your payment voucher along with a check or money order payable to Virginia Department of Taxation to:
  • Virginia Department of Taxation

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    Individual Income Tax Return Payment Options

    Use these options if you’re paying after you’ve filed your return. You can also pay at the time of filing through approved electronic filing options, and schedule your payment for any day up to the filing deadline.

    Online, directly from your bank account

    Not ready to create an account?

    You can pay using eForms.

    Make a return payment through Paymentus. A service fee is added to each payment you make with your card.

    Check or money order

    Mail the 760-PMT voucher with check or money order payable to Virginia Department of Taxation to:

    Virginia Department of Taxation

    Include your Social Security number and the tax period for the payment on the check.

    Qualifying farmers, fishermen, and merchant seamen should use the 760-PFF voucher.

    Note: If you filed a paper return with your local Commissioner, mail the voucher and check to the same place you sent your return and make the check payable to the local Treasurer.

    Payment Fee – Returned Payments

    If your financial institution does not honor your payment to us, we may impose a $35 fee . This fee is in addition to any other penalties and interest you may owe.

    How Income Taxes Are Calculated

    How Much Virginia Personal Property Tax/Bill We Pay For Multiple Cars?
  • First, we calculate your adjusted gross income by taking your total household income and reducing it by certain items such as contributions to your 401.
  • Next, from AGI we subtract exemptions and deductions to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as ones spouse or children.
  • Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
  • Your location will determine whether you owe local and / or state taxes.
  • Last Updated: January 1, 2021

    When Do We Update? – We regularly check for any updates to the latest tax rates and regulations.

    Customer Service – If you would like to leave any feedback, feel free to email

    …read more

  • Our Tax Expert

    Jennifer Mansfield, CPATax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAssets tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

    …read more

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    Changes In Income Or Exemptions

    If your expected Virginia adjusted gross income changes during the year, re-compute your estimated tax to determine how much your remaining payments should increase or decrease.

    A change in income, deductions or exemptions may require you to file an estimated payment later in the year. If you file your state income tax return and pay the balance of tax due in full by March 1, you are not required to make the estimated tax payment that would normally be due on Jan. 15.

    If you file your return after March 1 without making the January payment, or if you have not paid the proper amount of estimated tax on any earlier due date, you may be liable for an additional charge for underpayment of estimated tax.

    File With Approved Tax Preparation Software

    If you don’t qualify for free online filing options, you can still file your return electronically with the help of commercial tax preparation software. View approved software options.

    To file on paper, see Forms and Paper Filing below. If you do choose to file on paper, please note that, due to COVID-19 workplace protocols and mail delays, it will take longer for us to process your return.

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    Why Is Your Refund Different Than You Expected

    Errors or missing information

    If your tax return had one or more errors, we may need to adjust your return leading to a different refund amount than you claimed on your return. We will send you a letter explaining the adjustments we made and how they affected your refund. If you have questions about the change, please call Customer Services.

    Tax refund offsets – applying all or part of your refund toward eligible debts
    • If you owe Virginia state taxes for any previous tax years, we will withhold all or part of your refund and apply it to your outstanding tax bills. We will send you a letter explaining the specific bills and how much of your refund was applied. If you have questions or think the refund was reduced in error, please contact us.
    • If you owe money to Virginia local governments, courts, other state agencies, the IRS, or certain federal government agencies we will withhold all or part of your refund to help pay these debts. We will send you a letter with the name and contact information of the agency making the claim, and the amount of your refund applied to the debt. We do not have any information about these debts. If you think a claim was made in error or have any questions about the debt your refund was applied to, you’ll need call the agency that made the claim.

    If you have a remaining refund balance after your debts are paid, we will send a check to the address on your most recent tax return. We cannot issue reduced refunds by direct deposit.

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