Many states require the filing and payment of state taxes on top of federal taxes, making the tax process more challenging. There’s no shortage of statistics regarding various tax situations in the U.S.
For instance, one in four Americans hold off filing until the deadline to file taxes, stating that the process is too “complicated and stressful.” Indeed, this multi-tiered income tax system can lead to confusion and, possibly, state tax debt.
To avoid mishaps with the IRS and your state return, it’s best to stay on top of your state taxes as you do with federal taxes by conducting regular status checks with your state government.
If you want the question “do I owe state taxes?” answered, this article will discuss the methods for determining your state tax debt.
Which States Do and Do Not Have State Income Tax Policies?
Tax policies vary per state, and some do not impose state income taxes. If you live in a state with an income tax policy, it’s best to know how much you owe to the state government.
Here are the states that impose income tax policies or otherwise.
- States with a State Income Tax
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- Washington D.C.
- West Virginia
- States With No State Income Tax
6 Steps to Check if You Owe State Taxes
Checking whether you owe state taxes will depend on your location. However, while it may differ per state, the process will generally follow the same steps.
Check your mail—they’ve probably already sent you a notice
The most straightforward method to check if you owe state taxes is checking your mail. Like IRS notices, your state tax department will mail notices to your last known location. These notices often state the amount, due dates, process, and other necessary information regarding state tax compliance.
Visit your state tax department’s website to check your balance
Another quick way of checking your state tax account balance is to refer to your state tax department’s official website. You can access the portal for your tax information and activities using your online services account. You can also review your tax filing reports in case you want to check if you filed the right amount.
Contact your state’s DOR or Tax Collection department
Those that impose a state tax have a Department of Revenue (DOR) or Tax Collection department. If you can’t access your account on your state tax department’s website, visiting the DOR or Tax Collection office allows you to see your tax records and discuss your state tax status with authorized personnel.
Check your mail for notice of suspension for your licenses
If you receive any license suspension notices, that may indicate unpaid state taxes. A state may penalize taxpayers with outstanding state tax balances by suspending their driver’s, occupational and professional, hunting and fishing licenses, etc.
The state will only reinstate your licenses if you meet certain conditions, agree to a state payment plan, or pay off all debts. Otherwise, they will remain suspended or may be revoked in worst-case scenarios.
Work with a tax professional
Through a Tax Information Authorization or Power of Attorney Authorization with the specific State Department of Revenue, a tax representative will be able to obtain details on your state tax debts.
Watch out for your state’s post regarding delinquent taxpayers online
Some states post a list of top delinquent taxpayers online to notify individuals with significant state tax debts once they’ve exceeded the 90-day grace period for settling tax debts.
States that publish top delinquent taxpayer lists want to discourage U.S. citizens from paying taxes late or not settling them altogether, which is a massive burden on tax-compliant individuals. If you find your name on this list, expect to receive the notification via a public post online.
Tackling State Taxes
Taxes are complicated, causing many to struggle in understanding and complying with various tax processes. Here, determining if you owe state taxes is in your best interest. Get ahead of your tax-related affairs before they catch up to you, and you will save a lot of time, effort, and money.
If you are faced with a tax problem and need an expert to help you settle the issue, reach out to us at Peace of Mind Tax Help. Offering top-notch tax negotiation services since 1997, our team comprises leading experts in tax negotiation and mediation who can help you minimize your tax liability. Contact us today and get peace of mind.