Idaho State Tax Rate 2018: Everything You Need to Know
Are you a resident of Idaho or planning to move there? One of the essential aspects you need to consider is the state tax rate. Understanding the tax rate for a specific year can help you plan your finances better and ensure compliance with the state’s tax laws. In this article, we will delve into the details of Idaho State Tax Rate for the year 2018.
Idaho State Tax Rate for 2018
**The Idaho State Tax Rate for the year 2018 was a flat rate of 6.925%.** This rate applied to all taxable income earned by individuals and businesses in the state. Unlike some other states, Idaho does not have different tax brackets based on income levels. Instead, a single rate is applied to all income levels.
Additionally, it is important to note that this rate is applicable to both federal and state taxable income. It is crucial to understand the difference between federal and state taxable income to ensure accurate tax filing.
Understanding Federal Taxable Income vs. State Taxable Income
While the federal taxable income forms the basis for the calculation of federal income tax, state taxable income includes adjustments and deductions specific to a particular state.
Some common adjustments made to the federal taxable income while calculating the state taxable income include adding back federal tax refund, interest from federal obligations, and social security benefits. On the other hand, deductions such as education expenses and contributions to state-sponsored savings plans may be subtracted from the federal taxable income to compute the state taxable income.
Income Tax Credits in Idaho
To provide some relief to taxpayers, Idaho offers certain income tax credits that help reduce the overall tax liability. Let’s take a closer look at some of these credits:
1. Child Tax Credit: Families with qualifying children may be eligible for the child tax credit. This credit can help reduce the tax liability by up to $205 per child.
2. Earned Income Credit: The earned income credit (EIC) is available to low-to-moderate income individuals and families. The amount of credit depends on various factors such as income, filing status, and the number of qualifying children.
3. Property Tax Credit: Idaho also offers a property tax credit to help taxpayers offset a portion of their property taxes paid during the year.
Frequently Asked Questions
Now that we have covered the basics of Idaho State Tax Rate for 2018 let’s address some common questions that individuals may have:
What if I have multiple income sources?
If you have income from multiple sources, you need to report the total income under the state tax return. However, it is important to calculate the taxable income for each income source separately and then combine them to arrive at the total taxable income.
Are there any specific deductions available?
While Idaho does not have any specific deductions exclusive to the state, you can claim deductions that are allowed by the federal government. Some common deductions include mortgage interest, state and local taxes, and charitable contributions.
How do I file my Idaho State Tax return?
Idaho state tax returns can be filed electronically or by mail. The Idaho State Tax Commission provides an online portal where you can file your return electronically. If you prefer to file a physical copy, you can download the required form from the official website and mail it to the designated address.
Final Thoughts
Understanding the Idaho State Tax Rate for 2018 is crucial for anyone residing or planning to reside in the state. It helps individuals and businesses plan their finances, comply with tax laws, and ensure accurate tax filing. By staying informed about the applicable tax rate and available credits, you can make informed decisions to optimize your tax liabilities.
In conclusion, while tax laws may seem complex, educating yourself about the specific tax rates and deductions applicable in Idaho can go a long way in ensuring compliance and avoiding any unnecessary financial burden. If you have any further questions or need clarification, it is always advisable to seek professional assistance from a tax advisor or consult the official Idaho State Tax Commission website.