Hello. I moved from Maryland to Virginia a few weeks ago. In Maryland I always ended up owing taxes because the local 3.5% County tax wasn’t added in my withholding for some reason. I don’t believe there is a local tax in the county I moved to, but I’m trying to predict how much I will owe in state taxes next year. I placed one exemption on my Virginia form.
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FIRSTLY, I am assuming that you are ok with your Federal Tax Withholdings, since there is no mention of the latter in your question. However, if you would like to review this matter, you may obtain further information by clicking on the link below:
Underpayment Penalty
SECONDLY, let us explore a few scenarios:
MD LOCAL INCOME TAX RATES
MD Local Income Taxes
Per the Comptroller of Maryland "2023 Maryland Income Tax Rates. Maryland's 23 counties and Baltimore City levy a local income tax which we collect on the state income tax return as a convenience for local governments. The local income tax is calculated as a percentage of your taxable income"
Contact your MD employer to make arrangements to adjust your local withholdings if you believe that the current local withholdings per pay period will be insufficient when you file your MD Taxes. OR DIRECTLY contact the Locality to make arrangements.
VA LOCAL INCOME TAX RATES
Virginia does not allow the collection of local income taxes. Localities collect taxes taxes through sales and property taxes and on state and federal funds.
VA Retail Sales and Use Tax
Thank you. Yes, federal withholding makes sense to me. I work in Washington, DC, and I've notified my employer of the address change. Done with Maryland. It's just the last couple of years I ended up owing more to Maryland than I expected, even when withholding extra, predicting it would even out, but I still owed an extra $1000 for 2023. Well, I'll see if Virginia is withholding about 5% when I view my next paycheck and hope for the best next year.
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