How to file your 2023 Massachusetts and federal income taxes for free

Next, DOR will multiply the liability as reported on a taxpayer’s personal income tax return (after being reduced by any credits) by the “excess revenue percentage” to calculate the taxpayer’s excess revenue credit amount. As a taxpayer, you must make estimated payments if the expected tax due on your taxable income not subject to withholding is https://turbo-tax.org/ more than a certain amount. Generally, you need to pay at least 80% of your annual income tax liability before you file your return for the year. You pay through withholding and making estimated tax payments on any income not subject to withholding. For most taxpayers, Massachusetts has a flat income tax of 5 percent.

What You Need To Know About Massachusetts State Taxes

Tax law treats some products as services and therefore exempts them, while others may have taxable and non-taxable elements. Although other products may be labeled custom or a service, they may not meet the legal definition for tax purposes. Taxpayers who do not comply with the requirements to file returns, make payments or electronically submit data to us will be penalized up to $100 for each return, payment or data transfer they submitted incorrectly. See Penalty for Failure to File, Report or Pay in the Prescribed Format for more information. There are interest and penalty charges for not filing sales/use tax returns on or before the due date.

Taxable items

In Massachusetts, average property taxes are paid about 1.14% of assessed home value, according to the Tax Foundation. Enter your filing status on either Form 1 or 1-NR/PY, Line 1, and fill in the appropriate oval. Enter your spouse’s Social Security number in the appropriate space at the top of the return under taxpayer’s Social Security number.

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You should also fill one out anytime your filing status changes or you experience a big life change, like having a child. As a vendor, you must pay tax on all sales even if you didn’t receive payment at the time of sale. You can only claim reimbursement for tax remitted on bad debts on an annual basis by filing a Claim for Bad Debt Reimbursement (Form ST-BDR). It must be filed by the due date, including extensions, of your federal income tax return for accounts determined to be worthless during the prior fiscal year. Residents who turned 65 before Jan. 1, 2024, can receive a $700 exemption on top of the state’s personal exemptions. This is per person (not household), so if your  spouse turned 65 by Jan. 1, they can also claim the exemption.

The filing deadline for 2023 Massachusetts state income tax returns was April 17, 2024. To have qualified for a six-month extension, you must have paid at least 80% of the total amount of tax owed by that deadline. If you didn’t owe any taxes and didn’t file by the deadline, an extension to October is automatically granted. Anyone earning over $8,000 in Massachusetts annual gross income is required to file a state tax return. Those earning less than this amount do not need to file a return, but they can still file a return to claim refundable tax credits. This $8,000 income threshold is on a per-person basis, giving married couples the option to file jointly or separately.

If your company has an HR department, you can schedule a meeting to discuss your options. You may also be able to shelter money from taxes by enrolling in a commuter benefits program or by authorizing payroll deductions for contributions to a 529 college savings plan. For the earned income tax credit, the income thresholds, range from $16,480 for a single person to $59,187 for a married couple, filing jointly, with three or more qualifying children. Baler’s office said Friday the 13% is a “preliminary estimate and will be finalized in late October, after all 2021 tax returns are filed.” New residents can obtain information on state tax rates from the Massachusetts Department of Revenue’s website. The document makes clear that it begins with the “credits required to be issued for the fiscal year ending June 30, 2022.”

1. For a paper return to be considered timely filed, DOR must receive it on or before the due date, or if delivered after the due date, it must be postmarked by the U.S.
2. New residents can obtain information on state tax rates from the Massachusetts Department of Revenue’s website.
3. Cash App Taxes doesn’t support the e-filing of state-only returns, however, paper filing of state-only returns is supported.
4. Most refunds are claimed on an original return and will be issued automatically by the Department.

You must have previously received a bill for the liability, be eligible and meet all the requirements to apply. If you are unsure as to whether you have a debit block on your bank account, please contact your bank. You can also enter the word “payment” in the filter bar to only see submissions relating to payments.

Exemptions are allowed for newspapers, magazines, books used for religious worship, and educational textbooks. The vendor must get an Exempt Use Certificate (Form ST-12) from the purchaser and maintain proper records of these sales. The statement must be signed under the pains and penalties of perjury. Newsletters, however, are generally not treated as newspapers and may be taxable. Willful failure to collect and pay over taxes is also a felony and is punishable by a fine up to $10,000 and/or imprisonment for up to 5 years.

An extension to file a return doesn’t extend the due date for paying any tax due. Sales of standardized software are taxed, regardless of whether the software is delivered electronically or in a physical format. Charges to access or use software on a remote server are also taxable. However, tax is not imposed on transactions where a customer isn’t charged for the use of software and the customer really intends to acquire goods or services other than software. Food products for human consumption and food items purchased with federal food stamps are generally exempt from the sales tax. Businesses and individuals incurring use tax liabilities who are not registered vendors may file a Business Use Tax Return (Form ST-10) or Individual Use Tax Return (Form ST-11).

You must continue to collect and send sales tax on your tobacco product sales, and may take credit on your sales tax return (for as much prepaid sales tax you paid your suppliers). Wholesalers of tobacco products must collect and send sales tax to retailers and report these sales as taxable sales on their sales tax return. To receive the volunteer tax preparation services, individuals and families must not exceed $60,000 in adjusted gross income. FileYourTaxes.com offers a free federal return, for those 66 and younger, with an adjusted gross income between $8,500 and $73,000. Only one of the company’s two offerings is available to Massachusetts residents.

Condo owners are also entitled to a credit for repairs done to common areas in addition to the work done in their individual units. This credit isn’t refundable, but if the credit is more than you owe, you can carry the excess forward for up to three years. If a portion of your expenses was reimbursed by your employer, the total paid amount that you claim must be reduced by the reimbursement amount. Gasoline and diesel taxes in Massachusetts each total 24 cents per gallon. Since DOR is moving toward account IDs, we encourage you to use the account ID number.

Like the W-4, the M-4 can be revised and filed again at any point during the year if your situation changes (for example, if you gain a dependent). But if your information is the same on both your M-4 and W-4, you don’t have to fill out the former. The size of your paycheck will depend, of course, on your salary or wages. But it will also depend on your marital status, your pay frequency and any deductions from your earnings. One thing that doesn’t change, no matter where you live in the country, is FICA tax withholding. That’s the 6.2% for Social Security taxes and 1.45% for Medicare taxes that your employer withholds from every paycheck.

If you qualify for an extension, your return is due on or before October 15, 2024. Willful tax evasion is a felony punishable by a fine up to $100,000 for individuals or $500,000 for corporations and/or imprisonment for up to 5 years. Out-of-state vendors who meet any of the vendor definitions listed above generally have the same responsibilities as Massachusetts vendors.

Learn about new tax relief, the short-term capital gains tax rate change, the 4% surtax, and more. Cash App Taxes doesn’t support the e-filing of state-only returns, however, paper filing of state-only returns is supported. Cash App Taxes only provides free state e-filing in cases when a taxpayer also e-files a federal return through Cash App Taxes. However, any individual clothing item that costs more than $175 is taxable on the amount it goes over $175. Thus, the tax on a $200 suit would be $1.56 (which is 6.25% of the taxable $25 difference). If buying multiple items, any sales tax is charged only on individual items over $175, no matter what the total bill is.

Active Duty Military with an adjusted gross income of $79,000 or less will also qualify. The Department has published several guides, which provide more specific information detailing the sales tax compliance requirements for certain industries and types of contractors. Although sales to exempt organizations are exempt from tax, retail sales made by exempt organizations are subject to sales tax, unless an exemption applies. A business with nexus in Massachusetts is required to collect tax when it ships goods to a consumer in Massachusetts on behalf of a retailer that is not required to collect the tax because it does not have nexus with Massachusetts.

For example, if you buy furniture for your Massachusetts business or home from an out-of-state firm, you don’t pay sales tax, but you still have to pay the use tax. The use tax applies because the furniture wasn’t subject to a sales tax in the other state and because it’s for use in Massachusetts. Unlike for the sales tax, the buyer generally pays the use tax directly to Massachusetts. The IRS and the Massachusetts Department of Revenue (the state’s version of the IRS) each offer deductions and credits, many of which overlap. But even though our great state is often (not-so-fondly) referred to as “Taxachusetts,” the DOR has many of its own unique deductions and credits that help you whittle down what you owe.

If your employer doesn’t withhold for Massachusetts taxes, you will have to pay those taxes in a lump sum at tax time or make estimated tax payments to the state (using form Form 1-ES). According to the IRS’ Free File website, apps.irs.gov/app/freeFile, “every” taxpayer with an adjusted gross income below $73,000 should be able to file for free. While this is technically true, as there are three programs that allow people in Massachusetts to file federal tax returns for free with income below $73,000, they all charge for state tax returns. “In general, eligible taxpayers will receive a credit in the form of a refund that is approximately 13% of their Massachusetts Tax Year 2021 personal income tax liability,” Baker’s office said in a statement.

Once you’ve calculated all your deductions and figured out how much (if anything) you owe the government, that’s when tax credits come into play. If you got slammed with a big tax bill last year, you have a couple of options to prevent it happening again. You can file a new W-4 or M-4 and request a specific dollar amount of additional withholding from each paycheck. Both forms have a line where you can write in an additional dollar amount to withhold from each paycheck.

The dealer collects the sales tax on boats and recreational vehicles at the time of sale. For casual sales, the sales/use tax is due before registering or by the twentieth day of the following month, whichever occurs earlier. For motor vehicle and trailer sales, the buyer directly pays the Commonwealth.

While the business with nexus in Massachusetts may not accept a resale certificate from its customer that doesn’t have nexus in Massachusetts, it may accept from its customer a notarized statement on the customer’s letterhead instead. For a more detailed explanation of the rules regarding drop shipment transactions, please see TIR 04-26, Letter Ruling 85-60, and Directive 86-21. Infrequent and nonrecurring transactions made by people or businesses that don’t regularly make such sales. For example, sales of used appliances by a homeowner or sales at infrequent yard sales. Please note that generally, casual sales of cars, boats or trailers are taxable except for certain family transactions.

The filing extension is automatic, with no need to file forms, if at least 80 percent of the tax due is paid by the April 17 deadline. Learn more about filing an extension, as well as penalties and interest.This guide was originally published on March 16, 2023 and has been updated to reflect new information. Income tax returns must be filed every spring, but income taxes are also paid all year round.

If you earn money in Massachusetts, your employer will withhold state income taxes from your earnings, regardless of whether or not you are a Massachusetts resident. To report your Massachusetts income (and to be eligible for a refund from the Massachusetts Department of Revenue) you must file a non-resident income tax return in Massachusetts. To be eligible, you must have paid personal income taxes in Massachusetts in the 2021 tax year and filed a 2021 state tax return on or before October 17, 2022. About 3.6 million Bay Staters are expected to get back a piece of $2.941 billion that state government is required to return after it collected more in taxes last year than a 1986 voter law known as Chapter 62F allows. Auditor Suzanne Bump certified that amount last month and the Baker administration said it planned to return the money via mailed checks or direct deposits, likely starting in November. To be eligible, a taxpayer must have filed a 2021 state tax return by Monday.

Since then, a top senator quibbled with the administration’s plan — “The law is pretty clear, in my opinion, if you read the law,” Senate Ways and Means Chairman Michael Rodrigues said last month. “So if you’re going to follow the law, which we’re hoping everybody follows the law, then there will be credits next year.” — and a small group of progressives have launched a bid to change how the excess revenue is returned mass state taxes to taxpayers. Massachusetts offers tax deductions and credits to reduce your tax liability, including a rent and commuter deduction and a tax credit for taking care of a child or other dependent. You may also qualify for certain personal income tax credits, which can reduce the amount of tax you owe. If you can’t make your personal income tax payment in full, pay as much as you can with your tax return.

The median property tax bill in the state is $5,091 – one of the highest in the country. If you choose to add an additional bank account to your payment account, you must provide your financial institution’s routing number, which is the first 9 digits located on the bottom left corner of a check from your bank. Unlike other states, Massachusetts does not have a state standard deduction. Instead, state taxpayers can determine if they qualify for certain tax exemptions to reduce the amount of tax owed. An overpayment claimed on a return may be applied as a credit for your next year’s estimated tax or you may request that it be refunded to you.

A spokeswoman for the Executive Office of Administration and Finance was out of the office when the regulation repeal and new guidance was announced Friday. The budget office’s chief of staff, to whom media inquiries were directed, did not acknowledge the News Service’s questions. Massachusetts has some of the highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the average price of cigarettes in Massachusetts at around $9 per pack. Once a Payment Channel is added, simply access the payment detail screen and select the desired Payment Channel from the drop-down list. Please note that adding a new Payment Channel while you have an active payment agreement will not cause your next payment to come from the Payment Channel automatically.

A city or town may also charge a local sales tax on the sales of restaurant meals. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Unlike the 6.25% sales tax, which is collected by sellers, use tax is generally paid directly to the state by the purchaser. The guidelines or video will provide step-by-step instructions on how to complete your state tax return.

Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $2 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state. The tax is on the purchase or use of “tangible personal property.” This includes nearly any purchasable good, with some exceptions.

You can choose another state to calculate both state and federal income tax here. In Massachusetts, your employer will withhold money from your paychecks to put toward your state income taxes. You can fill out Form M-4 and give it to your employer to indicate withholding exemptions.

View how much tax you may pay in other states based on the filing status and state entered above. Massachusetts allows for other miscellaneous deductions, such as jury duty pay surrendered to your employer, some attorney fees and court costs for unlawful discrimination and other expenses. If you, your spouse or your dependent attend a qualifying two- or four-year college to earn a degree, diploma or certificate, you may deduct any tuition costs that exceed 25% of your Massachusetts AGI. However, the amount of any scholarships, grants or financial aid that the student receives needs to be subtracted from the total tuition. Any business taxpayer registered with DOR is eligible to use this option.