It’s that time of year again, where the snow is still on the ground and a cheery letter arrives from the capital to inform you your state tax debt is due. All year, people who work for an employer have had percentages of their income set aside to pay their state tax debt, and the New Year is the reminder that the bill is due.
What is State Tax Debt?
Your state tax debt is the amount you owe to state for the percentages of incomes and property holding gains made in the past year. This includes taxes on your wages earned through your employment, financial gains made on any portfolios, stocks, bonds, or similar financial instruments on which you gain income, and the valuation of your property, such as homes, condos, and the like. All of this percentage is added up and calculated through to state taxes, and the number that results on the bottom line is you state tax debt for the year.
For people who work for someone else, this recording and collection of taxes is completed simply through withholdings made by the employer through as a percentage of weekly income. It is removed and sent straight to the state with each paycheck. At the end of the year, a filing of tax documents to the state will determine how much this weekly payment has in the effect of the year-end amount owed. Properly filing of state tax documents will determine if the amounts were enough to cover the state tax debt, whether it was more than enough and how much the taxpayer will receive in a refund, or whether it was not enough and the taxpayer will now owe an additional amount to the state.
Failure to Pay a State Tax Debt
Failing to pay a state tax debt can have serious consequences on not only your private holdings as a taxpayer, but also on the holding you control as a business owner. Collecting taxes to run the day to day operations of government facilities is the primary job of the government, and should taxes be neglected, rest assured they will be collected. Notices will begin to appear, informing you of the specifics of you past debt and ways to pay it off. These notices will be attached with late fees and interest charges, and the amounts will only increase over time. It is highly recommended that you pay your taxes properly and on time.