chocolatechip Posted April 15, 2015 Share Posted April 15, 2015 Any idea why someone with zero taxable federal income and the same AGI in federal and state income would end up owing state income tax? Shouldn't zero taxable income mean no income tax? (I'm not talking about SS and medicare. I'm speaking simply of income tax on the state return.) Quote Link to comment Share on other sites More sharing options...
forty-two Posted April 15, 2015 Share Posted April 15, 2015 That happens to me every year, because the federal return has the standard deduction (or itemized deductions), which my state taxes do not have, plus bigger personal exemptions than my state taxes do. So more is subtracted from the AGI for federal taxes - enough to wipe it all out, leave me with no taxable income - while for state taxes not nearly as much as subtracted from the AGI, so I end up with taxable income and so taxes. Does that make any sense? 3 Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted April 15, 2015 Share Posted April 15, 2015 Any idea why someone with zero taxable federal income and the same AGI in federal and state income would end up owing state income tax? Shouldn't zero taxable income mean no income tax? (I'm not talking about SS and medicare. I'm speaking simply of income tax on the state return.) Because states make their own rules about what they tax and are not bound by the federal rules. Quote Link to comment Share on other sites More sharing options...
chocolatechip Posted April 15, 2015 Author Share Posted April 15, 2015 That happens to me every year, because the federal return has the standard deduction (or itemized deductions), which my state taxes do not have, plus bigger personal exemptions than my state taxes do. So more is subtracted from the AGI for federal taxes - enough to wipe it all out, leave me with no taxable income - while for state taxes not nearly as much as subtracted from the AGI, so I end up with taxable income and so taxes. Does that make any sense? Thank you! This is very helpful and makes sense. Quote Link to comment Share on other sites More sharing options...
Amy in NH Posted April 15, 2015 Share Posted April 15, 2015 If you itemize deductions on your federal tax form, you can deduct any state income taxes you pay (as well as the fees you paid to a tax preparer). Quote Link to comment Share on other sites More sharing options...
Lawyer&Mom Posted April 15, 2015 Share Posted April 15, 2015 Another factor is your withholding. You might have had proportionally less withheld for your state income tax, so you "owe" at the end of the year. Whether you owe or get a refund depends on your withholding, not on the total amount if taxes you pay. Quote Link to comment Share on other sites More sharing options...
chocolatechip Posted April 15, 2015 Author Share Posted April 15, 2015 Thanks for the insights, all. We're all officially filed! Whew. Quote Link to comment Share on other sites More sharing options...
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