Can I file state taxes without filing federal?
Published on August 30, 2023
Updated on November 11, 2024
by Sparsh Ganeriwala
Sparsh Ganeriwala, an IRS Enrolled Agent with over 12 years of expat tax experience, specializes in filing US taxes for Americans living in Canada, US/Foreign Trusts, and GILTI Tax.
Table of Contents
Can I file state taxes without filing federal?
It depends on your state and income level, but most states need information from your federal tax return to calculate your state taxes. Hence, filing federal taxes is necessary to complete your state tax return, but strictly-speaking, you can file a state tax return without filing a federal return.
What is the difference between state taxes and federal taxes?
Federal taxes are paid to the US central government, which is managed by the IRS, while state taxes are collected by individual state governments.
Federal taxes finance various national programs and projects, while each state levies state taxes to support state-specific needs such as infrastructure, public schools, and local services.
Do Americans living abroad need to file New York or Californian tax returns?
Generally, yes, if you’re still a resident of that state, have income from the state, or hold assets in the state.
You can check the tax filing requirements for all US states when you live outside the United States.
Why use the IRS Streamlined Tax Amnesty Program?
It’s for American citizens that didn’t know they had to file US tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties.
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Breaking state residency, what is that?
When you leave a state to live in another location within the US or abroad, you need to file a Part-year tax return with the state.
A Part-year tax return lets the state know that you’ve made a permanent move out of the state and won’t be filing any further tax returns unless you make a permanent move back.
This only applies, of course, if you’re not generating income from the state, such as rental income after you’ve moved.
What are the different taxes under federal and state tax?
Here are the common taxes to encounter with federal and state taxes:
Federal taxes
- Income tax: A progressive tax with seven marginal tax brackets from 10% to 37%.
- Capital gains tax: Tax from profits from selling assets such as stocks or real estate.
- Corporate income tax: Tax from earnings of businesses and corporations.
- Estate and gift tax: Taxes on the transfer of wealth through inheritance or gifts.
State taxes
- Income tax: The tax system can be progressive or flat-rate depending on the state.
- Sales tax: Tax on goods and services purchased within the state.
- Property tax: For homeowners of the state, tax amount is based on the value of their property.
- Excise tax: Taxes on specific goods like tobacco, alcoholic drinks, and gasoline.
Do I need to submit a federal income tax return if I have no income?
The federal law doesn’t require you to file a tax return if you didn’t earn any money during the previous tax year or if your income is below the federal threshold.
However, it could be beneficial in certain situations for you to submit a federal income tax return. For instance, you might be eligible for certain credits or refunds you wouldn’t know about otherwise. Your state tax obligations might be intertwined with your federal income status.
Can I still file state taxes if I’m not required to file federal taxes?
It depends on your state laws; state and federal taxes don’t always go hand in hand. You could be in a situation where you don’t have to report to the IRS but still must file with your state.
If the opposite situation arises, even if you live in a state without an income tax like Alaska or Florida, your federal obligations remain the same.
Can I file state taxes before federal taxes?
It’s best to file federal first, as your state return may require information from your federal return. Some states will want you to attach your federal return to see that as proof.
Generally, state returns can be filed simultaneously with your federal return.
What are the penalties for filing federal taxes?
Here are the common penalties for filing for federal taxes:
- Late filing penalty: The IRS may charge a penalty that grows the longer it was being delayed.
- Accuracy-related penalty: Filing incorrect information can lead to a penalty amounting to a percentage of the understated tax.
- Failure-to-Pay penalty: A penalty can accrue for late payment or failure to pay taxes.
- Underpayment of estimated tax penalty: This is for those who didn’t pay enough taxes during the year.
- Fraud penalties: Fraudulent filings can lead to severe penalties.
Does the state offer tax deductions and credits?
Yes, some states offer deductions similar to federal ones, while others provide unique state-specific tax breaks. Here are some classifications of state tax deductions and credits:
- State standard deduction: Some states provide their standard deductions, while others either adopt the federal amount or don’t offer a standard deduction at all.
- State-specific itemized deductions: States may allow deductions similar to federal itemized deductions, such as mortgage interest or property taxes, but the amounts and rules can vary.
- State sales and property tax deductions: Many states provide deductions for sales or property taxes paid, but the rules for these deductions can differ.
- State-specific credits: Some states have unique credits available for taxpayers, such as credits for hiring local workers, supporting local businesses, or investing in certain industries.
- Earned income tax credit (State-Level): Some states offer their own versions of the earned income tax credit, usually based on a percentage of the federal credit.
- Education credits: Some states offer credits for education-related expenses, such as tuition or student loan interest.
Federal and state tax systems provide various deductions and credits to lower tax liabilities. While federal tax credits and deductions are consistent nationwide, state credits and deductions typically address local priorities.
Does the IRS share information with state tax authorities?
Yes, a taxpayer’s information goes from the IRS to your state’s tax department to make sure all the numbers align. This can impact the taxpayer’s overall tax compliance. If mistakes were made on their federal return, it might also be spotted by the state, and vice versa.
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