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Local Income Tax Questions

What is local income tax?

Your local income tax is figured by a percentage of your taxable income. Local income tax is only applied to where you live. In many states the income tax rate maybe flat. Some states have an increasingly higher rate for taxpayers. In some places major corporations do not have to pay local income taxes but individuals do. The way of figuring, gathering and spending local income tax differs by the jurisdiction. Certain states may have exemptions that apply, for example investment income or retirement income. Your local laws may be different. All this can lead to questions like the ones answered by Experts below.

In the state Louisiana how would I figure my local income taxes?

Louisiana is one of a few states that do not have a local income tax, but Louisiana does have state income tax the scale of which is 2, 4 or 6%.. The rate of your income tax depends on the amount of your income. So if your income falls underneath below the 2% bracket, your income tax will be at 2%.

In the state of Ohio will an individual’s income tax differ depending on where one works or lives?

Your city tax is due first. City tax is based upon the income that is actually earned. An individual can also have taxes due for their resident city only if the tax rate is higher than the rate in the city you work.

If someone is missing their local wages and local income tax does this individual need a new W-2 Form?

Case details: Individual works in California for a Virginia based company and is paid from Virginia.

In many cases your W-2 does not include any local tax information the reason for this is most areas do not have local income taxes. The reason for not having that information could be a problem if you needed to pay local or state tax return. The federal government will not be worried if on the W-2 form there are no state and local boxes. Unless you are trying to file your local income tax return, your W-2 will be okay without your local tax information.

In the state of Pennsylvania is an individual required to pay taxes based on where he/she lives or where he/she works?

In the state of Pennsylvania an individual will be required to pay their taxes based on where they work instead of where they live. This is done in order to pay back respect to the city taxes.

If an individual lives in Toledo, Ohio but works in Michigan is he/she liable to pay local taxes in the state of residence?

There is no local income tax in the city of Toledo. However the tax is relevant to salary wages, and compensation for individual services received by Toledo residents. This also is relevant to non-residents of Toledo if work is done in the city of Toledo. If you are a resident in the city of Toledo you will have to pay income tax despite of where you work. In many cities in the state of Ohio they require an earning tax just as Toledo, which means you will pay tax as a resident no matter if you work in the town you live in or outside of the town.

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