What are the Income Law Requirements in the State of Maryland
Taxes are a part of everyone’s adult life. Nobody enjoys paying income taxes, even if we know that it is being paid to the government for a good cause. Income tax is a monetary charge that is levied on your income by the government. It is the income that is usually generated by businesses and individuals within a state’s jurisdiction. According to the law, it is mandatory for taxpayers such as yourself to file an income tax return annually and to determine what your tax obligations are. It is essential to know that income tax is a source of revenue for the government. The monetary gains are used by the government to fund public services, pay for government obligations, and provide goods for citizens.
In the U.S, some taxes are imposed at a separate federal, state, and local government level. Taxe charges are imposed upon income, payroll, property, sales, capital gains, dividends, imports, estates, and gifts, as well as various fees. The taxes, however, fall much more heavily on labor income than on capital income.
In Maryland state, the taxes coexist with federal tax laws. According to fundamental tax laws, both the state and the federal government have the right to tax both unearned and earned income. Salaries, wages, tips, commissions, bonuses, unemployment benefits, and sick pay are examples of earned income. Unearned income consists of interest, dividends, profits from asset sales, business and farm income, rental income, royalties, gambling winnings, and alimony. The federal taxes are handled and administered by the Internal Revenue Service and are subject to the Internal Revenue Code (IRC).
Tax rates in Maryland
Maryland's tax rates range from 2% on the first $1000 of taxable income and increase up to a maximum of 5.75% on revenues exceeding $250,000. Non-residents in Maryland are subject to a special tax rate of 1.75%, in addition to the state’s income tax rate.
Maryland's 23 counties and Baltimore City also impose an income tax, that is collected from the resident state tax return to local governments.
There are unique tax benefits that are available to taxpayers who are 65 years and older, military retirees, low-income families and families spending for child care.
The deadline for filing your income tax in Maryland is April 15, 2019.
How to file your Maryland state tax
You can e-file your state tax return and use external services such as professional tax preparers or software. You can also register on the Maryland comptroller's website, drop off a paper return at any of the branch offices or mail a paper return. The tax can be paid by money order, credit card, personal check, or, if you file electronically, by direct debit. If you use a credit card, you'll have to pay a convenience fee.
Income Tax returns in Maryland
Generally, citizens are required to file a Maryland income tax return if:
- They are or were a Maryland resident;
- They are expected to submit a federal income tax return; and
- If the gross income in the state of Maryland is equal to or exceeds the level for your filing status. The filing levels are also applied to nonresident taxpayers who are expected to file the tax return in Maryland.
Even if you are not expected to file a federal return, it may be necessary for you to file a Maryland return if your Maryland addition modifications have added to your gross income that exceeds the filing requirement for your filing status.
Filing statuses in Maryland
Maryland recognizes six tax filing statuses:
- Dependent (for any individual who can be claimed as a dependent on someone else's federal return, regardless of the individual's marital status), Head of household, Single, Qualifying widow(er) with a dependent child, Married filing jointly and Married filing separately