Federal tax returns are filed with the IRS, while state taxes are filed with respective state tax authorities.
Income Tax Rates
Federal tax rates are uniform across the country, while state tax rates vary widely by state. Some states have flat rates, while others use progressive systems.
Tax Deductions and Credits
Both federal and state taxes offer various deductions and credits, but these may differ by state, and some states do not have income taxes at all.
Filing Deadlines
Federal tax returns are due on April 15, whereas state deadlines may differ, typically falling on the same day or extended.
State-Specific Rules
States have unique rules regarding income tax, property tax, sales tax, and more, impacting overall tax liability.
Tax Forms
Federal taxes use forms like 1040, while each state may have its own set of forms .
Taxpayer Residency Requirements
States may have specific rules for determining tax residency, affecting how income is taxed in multiple states.
Audit and Penalties
Both federal and state tax returns are subject to audits, with penalties differing depending on whether they are federal or state-related.