Paying taxes is an unpleasant fact of life for the majority of Americans, and most taxpayers are responsible for not only federal income tax but also state income tax. For those taxpayers who live in a state with personal income tax, knowing how and when to file can be a confusing issue, especially with new filing methods and an increasingly complicated tax code. In general, you must file your state and federal taxes separately.
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Even though state and federal taxes use some of the same information, you can still file separately. Prior to sending each tax return, along with any payment or a request for a refund, on its way, you'll find that both tax returns use some of the same numbers. State tax returns may ask for numbers from certain lines of your federal return, which is why you should complete your federal return first if you have a choice. Both the state and federal governments are likely to consider the same types of income taxable, including investment income and wages from your employer.
Filing by Mail
Even when you choose to file the two together, your federal return goes to a branch office of the Internal Revenue Service, while your state return goes to your state's department of taxation office. You must send each return separately to ensure it arrives at the correct location. This also gives you the freedom to send your tax returns as you choose. For example, if you complete your tax returns in February and find that you will receive a refund from the federal government but owe additional tax to the state government, you can mail your federal return right away and wait until early April to file your state return. This may even allow you to pay one tax with a refund from the other form if you act quickly and there are no issues processing your refund.
Filing your tax returns online can simplify the process but also make it more difficult to know what is happening to your information. Tax software usually only asks for each piece of information once and then applies it to both state and federal returns simultaneously. You may only need to make a single payment, depending on how much you owe and to which government. However, even e-filing actually sends each tax return to a different agency. If you also owe a city tax, filing online can reduce three separate tax returns to a single procedure but with three electronic submissions.
In some cases, you may need to file your state and federal tax returns together. This happens if your state asks you to submit a copy of your federal return, which is most likely if you need to use additional schedules and forms to complete your federal taxes. However, even if you mail a copy of your federal return to your state, you still need to submit the original copy to the Internal Revenue Service. The copy you submit with your state return is simply for reference and won't be forwarded on to the federal government.