Did you know 9 states do not require residents to pay a personal income tax? Folks that live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming, are exempt from this bill. Furthermore, 7 other states simply enforce a flat tax rate. So what's the moral to the story? People who live in these states are able to buy more stuff because they pay less tax.
But for the rest of us, residential income tax is a necessary evil, one that takes a serious bite out of our disposable income. And while the forms are designed to collect the same data, they're all constructed differently. What follows is a breakdown of Form IT-140, the West Virginia Income Tax Return. If you don't live in West Virginia, not to worry, we'll be tackling the other 34 states soon enough.
When it comes to West Virginia's state tax form, there's a lot to like. At two pages and 27 lines it's ultra short. It's also constructed in a way that's not overly confusing; the lines, the questions, the verbiage, the instruction booklet are all easy to follow. You also have the option to electronically file, which will save you time (no snail mail) and aggravation (automatic calculations).
Still, there will be a couple things you won't like. First off, if you use the Official Payments Corporation to make a payment, you'll have a pay 2.5% servicing fee. That means if you owe $10,000, and choose to pay via a credit card, you'll have to pony up an additional $250. That's not cool.
Depending on the outcome of your return, you'll have to send it to a different location. Lastly, you have to reenter all your information from your W-2 onto Form IT-140W. This is unique to West Virginia; most states allow you to just include your W-2 with your return. Therefore, we're giving it a mediocre 6 of 10 on our user-friendly meter. Form designers could have done a better job.
Begin by filling in your name, Social Security number, and address at the top of the form. If you're a nonresident, you're filing an amended return, or you have endured a net operating loss, be sure to check the appropriate lines. Now you can knock out the exemption and filing status boxes before moving onward.
Enter your federal adjusted gross income on Line 1 and any state-specific additions or subtractions on Lines 2 and 3. Now subtract Line 3 from the sum of Lines 1 and 2 and put the balance on Line 4, this works out to be your West Virginia adjusted gross income. Line 5 is slotted for a low-income or earned-income exclusion; just look up page 44 of the booklet to see if you qualify/
Line 6 equates to your total exemptions multiplied by $2,000. If you don't have any exemptions you're allowed to enter $500 on Line 6. Subtract Lines 5 and 6 from Line 4 to get your West Virginia taxable income. Look up the tax table and enter your tax (based on income) that's due on Line 8.
Line 9 is for a family tax credit; look up page 35 of the instruction booklet to see if you qualify. Now, subtract Line 9 from Line 8 to yield your adjusted West Virginia tax, which goes on Line 10. There also appears to be a glitch in this forms matrix. Line 10 on page 1 is repeated at the top of page 2.
On Line 11, enter your West Virginia withholdings. Unlike most states (where you include your W-2 with your return), West Virginia requires you fill out all the information on your W-2 on Form IT-140W. Sigh, more steps.
On Line 12, enter any estimated tax payments, and on Line 14 any credits from a tax credit recap schedule, just look up the schedule on Page 20 of the booklet to see what applies. If you filed an amended return, write down the amount you paid with your original return on Line 15. Now add Lines 11 through 15 to get your total payments and credits, which go on Line 16.
Again if this is an amended return, you'll have to work through Line 17, otherwise carry forward the amount from Line 16 to Line 18. Now you can subtract Line 18 from Line 10 to yield the balance of tax due, which goes on Line 19. If you've incurred any penalties, record them on Line 20, add them to what you owe, and put the sum of both on Line 22.
But if Line 18 is larger than Line 10 (minus penalties), you've overpaid, enter the difference on Line 23. If you want a portion of this overpayment to go toward next year, record it on Line 24. If you feel like giving a portion of your overpayment to number of worthy causes, feel free to do so on Line 25. Add up the amounts on Lines 24 and 25 on Line 26. Now you can subtract Line 26 from Line 23 to yield the amount of your refund, which goes on Line 27.
All that's left is to jot down your direct deposit information, your name, and date the bottom of the form. If you had a tax pro help you, they will do the same. For additional inconvenience, West Virginia requires you to send your return to a different address based on its outcome.
If you're due a refund mail to:
WV State Tax Department
P.O. Box 1071
Charleston, WV 25324-1071
If you owe, mail your return to:
WV State Tax Department
P.O. Box 3694
Charleston, WV 25336-3694