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2023 US Tax Season and Taxation: Understanding State vs Federal Income Taxes

Generally, between January 1 and April 15 of each year when individual taxpayers traditionally prepare financial statements and reports for the previous year and submit their tax return to the Internal Revenue Service – this season is usually refer to as the Tax Season in the US. Late penalties and interest fees apply to tax returns filed beyond the end of the filing season.

After ‘misery’ for tax filers in 2022, IRS to start 2023 tax season stronger, taxpayer advocate says (Mykhailo Polenok / Eyeem | Eyeem | Getty Images)


The Internal Revenue Service (IRS) announced that the U.S Tax season begins on Monday, January 23. The IRS will begin accepting and processing tax returns for the 2022 tax year.


2023 Tax Brackets: You Might Owe the IRS Less Next Year Thanks to Inflation

2023 Tax Brackets: You Might Owe the IRS Less Next Year Thanks to Inflation

Read More: Tax Season: Free Assistance Available For Eligible Taxpayers Through VITA Program

What is Tax?

In order for the government to run it need money, the government gets its money by taxing its people.

Tax by definition is mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national. 

Government programs like Social Security and Medicare, as well as public services like roads and schools, are all financed with tax dollars.

In the United States, federal income taxes are collected by the Internal Revenue Service, or IRS.


Which states have state taxes on income?

Out of the 50 states in the US, 41 of which requires you to make a separate filing for your state tax. Seven states with the inclusions of Alaska, Florida, Nevada, South Dakota, Texas, the state of Washington and Wyowing do not have any type of income tax. In addition; only the states of New Hampshire and Tennesee have tax interest and dividend income.

If you need to file state taxes you will have to do it separately from your federal income tax return.


Does the Internal Revenue Service (IRS) handle state taxes?

Since state taxes are processed independently from the federal income tax return, the Internal Revenue Service or IRS will not handle your state taxes, your regional government deals with these particular taxes.


IRS’ statement ahead of the 2023 tax season

Internal Revenue Service Commissioner Doug O’Donnell said in a press statement: “This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,”

He also added that Taxpayers and tax professionals will see changes in many areas of the agency this year thanks to these new added resources. Thousands of new employees have received training to assist customers and answer phones.

The 2023 tax season represents the first normal since the start of the COVID-19 pandemic, with the department of Internal Revenue Services (IRS) using funds from the American Rescue Plan to beef up its staff.

The IRS has hired more than 5,000 new telephone assistors and support workers to aid assist tax filers and walk them through the process as it prepares to process more than 168 million individual tax returns.

Read More: $80 Billion Worth Of New Technologies And Customer Service Begins To Deploy As Tax Season Starts


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