It’s a new year, and that means new tax rates in various states. While they don’t have authority over the behemoth agency known as the IRS, state legislators are always sticking their hands in their state’s tax laws. As the states change tax laws, we should pay attention.
States Change Tax Laws
Here’s a look at how various states in the U.S. are changing their tax laws for 2012:
Income taxes for Oklahoma residents will drop slightly from 5.5% to 5.25% in 2012.
Tax day for those in Massachusets will also see a slight drop, with income taxes dropping from 5.3% to 5.25%.
If you’re wealthy and in Oregon, your tax rate will drop from 11% to 9.9%.
Middle-class families in New York will see their tax rates reduced by 0.40%.
The corporate tax rate for large businesses in Connecticut is rising from 8.25% to 9%. West Virginia is another story, where it will drop from 8.5% to 7.75%.
The gas tax in North Carolina is going up 4 cents in 2012, making the Tar Heel State the 7th in the nation for highest gas taxes.
Estate tax exemptions are increasing all over the country. In Illinois, the first $3.5 million (up from $2 million) is tax-free. North Carolina’s exemption rises from $5 million to $5.12 million in 2012, too. Rhode Island’s exemption rises from $859,350 to $892,865.
Unlike other states, Connecticut lowered its estate tax exemption from $3.5 million to $2 million, making more wealth transfers taxable.
What to Do Next
While states can change their tax laws annually, the IRS is the same agency year after year and the penalty and interest rates they charge are always through the roof, just like high interest credit cards. If you have back tax debt, hiring a tax attorney is your best bet at reaching a favorable repayment option, or you may be able to negotiate a lower amount than you currently owe.