Types of Taxes in Pennsylvania

Within the state of Pennsylvania, there is a wide variety of taxes that consumers and residents must pay. As with all many other things, the taxes that you are charged vary based on your situation. For instance, cigarette tax is only applied when you purchase cigarettes. Similarly, realty transfer tax only applies to those who are transferring real estate ownership. For a list of all the types of taxes that exist in the state of Pennsylvania, look below:

  • Cigarette tax
  • Corporation tax
  • Employer withholding tax
  • Inheritance tax
  • Malt beverage/liquor tax
  • Motor/alternative fuel tax
  • Partnership’s/S corporation/limited liability companies tax
  • Personal income tax
  • Public transportation assistance tax
  • Realty transfer tax
  • Sales, use and hotel occupancy tax
  • Small games of chance tax
  • Vehicle rental tax

For more information on these types of taxes, click here.

Income Tax

The most well-known tax levied on all working residents in the state of Pennsylvania is the income tax. But this tax can be divided into two main categories: federal income tax and state income tax. Additionally, only certain individuals are required to pay income taxes. This necessity is determined on the income level of the worker in question. If a resident does not make sufficient earnings, he or she will not be taxed for their income.

For more information on these two types of income taxes, read the detailed sections below.

State Income Taxes

You must file a PA personal income tax return if you meet one of the following criteria:

  • You gained a total gross income in Pennsylvania that is higher than $33, even if no tax is due.
  • You engaged in a transaction that resulted in a loss as an individual, partner of a partnership, shareholder of an S corporation or sole proprietor.

This law applies to minors, residents, part-time residents and non-residents of PA. As for what the state of Pennsylvania considers income, all of the following are taken into account:

  • Compensation
  • Dividends
  • Income/net gains from copyrights, patents, rents and royalties
  • Income/net gains from property dispositions
  • Income/net gains from trusts or estates
  • Interest
  • Net profits from a business
  • Winnings from gambling

Federal Income Taxes

In order to determine whether or not it is required for you to pay federal income tax, you must go through the following tables outlined by the IRS:

  • Table 1-1: Filing Requirements for Most Taxpayers
  • Table 1-2: Filing Requirements for Dependents
  • Table 1-3: Other Situations When You Must File a Return

All of the information found on these tables can be found here. Furthermore, as you read through the instructions, you will find that federal income tax requirements are applied based on three main components:

  • The worker’s age
  • The worker’s income
  • The worker’s filing status

Of these three factors, income is the only one that may bring some confusion. To the federal government all of the following aspects are included when taking this sum into account:

  • Services
  • Goods
  • All money earned, whether it was gained inside the country or outside, even if it was from the sale of your home

Filing Your Income Tax Return

Residents of Pennsylvania have three different ways that they can file their income tax return. First of all, the appropriate forms can be submitted in person or by mail. The third option, which is by far the most convenient for PA residents, is to file online through the Department of Revenue website. To begin the process, you can click here. On this website, you will be screened to see if you qualify for a free filing. Otherwise, you will have to pay if you want to file your income tax return online through the e-file program.

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