After getting through the hassle of completing your federal income taxes, the last thing on your mind is sitting down to work on your state taxes. Fortunately, it doesn’t have to be difficult: use Community Tax’s State Tax Calculator tool to figure out exactly how much you owe so that you don’t end up overpaying or underpaying this year.
Plus, with occasionally serious penalties imposed on folks who fail to pay taxes or accidentally pay them incorrectly, it’s important to ensure that you’re well-informed on all the taxes you may be responsible for. Before you sit down to sort out your West Virginia state taxes, read through out guide. We’ll walk you through what you should know ahead of tax season so that everything gets filed correctly — you may even get a refund!
State taxes are owed to the state you live in — not the federal government. Unfortunately, that means that once you’ve submitted your federal taxes, there’s a whole second set of taxes to start on.
Federal taxes are collected by the federal government in Washington DC. However, any states you’ve lived or worked in collect their own taxes on top of this. That’s because the Federal Government guarantees the rights of states to tax their citizens. Almost every state does collect taxes, which go toward important projects that improve the quality of life for citizens, like schools, roads, and emergency services.
You’ll want to be sure that you’re filing both your state and federal taxes correctly so you can avoid any audits or underpayments. We’ll start with an overview of West Virginia’s taxes.
Generally, West Virginia has a relatively low tax burden. While it might not have zero income tax, like Nevada, or no sales tax, like Oregon, its rates generally are so low that the benefits to taxpayers are actually similar or even better than in those states. In the next sections, we’ll dive deep into each of the most important taxes that you should be aware of as you start considering your tax burden for the year.
Like most states, West Virginia has a progressive tax system — that means that, the more you earn, the greater the percentage you pay in taxes. However, the actual percentage is fairly low. The greatest amount that a West Virginia taxpayer making over $60,000 a year will pay is 6.5%. That’s the top rate, even for those who make substantially more than $60,000.
However, the exact bracket you fall into also depends on your filing status. States (and the federal government) often have a different tax structure for those who are filing as a married couple, or are the heads of their household and so provide for the others who live there.
West Virginia has two tax schedules, each with four brackets. You can see what your income tax rate will be in West Virginia by finding the amount you make and the status that best describes you in the chart below:
Note: Self-employed West Virginians and sole proprietors are taxed on their business income to the extent that it accounts for the amount included in their federal adjusted gross income.
The rates and brackets described in the charts above are West Virginia’s personal income tax. Personal income tax is the amount that workers pay from their paycheck. It’s important to remember, however, that this is not the end of your tax burden. In addition to personal income tax, residents of most states are responsible for other taxes, like capital gains, sales tax, and excise taxes.
We’ll cover more of those in the next sections. Here are a few more quick facts about West Virginia’s taxes:
- West Virginia’s overall tax burden is 9.8%, the 18th highest in the US.
- Though that seems on the higher end, it’s actually quite low, as the maximum rate is 6.5%.
- Compared with a state like California (11%) or New York (12.7%) and it seems like quite the bargain.
Personal income taxes imposed by states differ from those imposed by the federal government. If you’re having a hard time wrapping your head around all the different requirements, don’t worry — you’re not alone. Contact a Community Tax preparer to help you make sure everything is filed correctly, you maximize your tax savings, and avoid a costly audit.
Capital gains taxes are levied on money earned through the stock market or by selling assets. That includes real estate investments, business investments, or other forms of personal property sold at a profit. The federal government imposes a capital gains tax, but states are permitted to levy one of their own as well.
The federal government’s capital gains tax increases with the amount that someone earns from their investments. Rates can be as low as 0% for gains under $40,000, but as high as 23% for those making hundreds of thousands from their investments.
In West Virginia, capital gains are taxed at the same rate as income. They’re included the sum total of your income for the year, so your personal income tax bracket is determined not only by the amount that you make from work, but also the amount you earn through investments. So, the top rate for capital gains state taxes in West Virginia is 6.5%
That means even if you make only $28,000 from your job, if you’re bringing in an additional $20,000 through investments (perhaps a late relative left you a massive investment account), you’ll be taxed 6%, the bracket for earners making $48,000, rather than 4.5%, the bracket for workers making $28,000.
Make sure you include any capital gains earned during the year in your state income tax return.
If you’re having trouble figuring out how your investments or real estate sales will affect your tax returns, Community Tax can help. Our professional tax preparers are experienced in making sure all your revenue streams are properly accounted for, so you can avoid an audit and make the most of your yearly return.
Sales taxes are added to the value of goods and services purchased from retailers. In West Virginia, the state-imposed sales tax is 6%. However, the state guarantees the right of municipalities to raise their sales tax rates if they choose to.
In nearly every county, the municipal sales tax is 1%, bringing the total sales tax up to 7%. The exceptions to this are Charleston, White Hall, Moorefield, and Wheeling, which each have a combined rate (state + municipal) of 6.5%.
West Virginia’s use tax is the same rate. What’s the difference between a sales tax and a use tax? In most states, the two are put together into a sales and use tax. Effectively, this means that even if you order products or services from a state with no sales tax — like Oregon — you still are responsible for paying taxes on its use in your home state. So before you get excited and order everything in bulk from Delaware, know that West Virginia will still come looking for its due come tax season.
States impose excise taxes on goods and services that they deem to be hazardous or unhealthy if used excessively. Common examples include cigarettes and alcohol, as well as marijuana or sex work in states where they are legal. West Virginia does have increased rates for such products, as well as a gas tax levied to aid in infrastructure maintenance.
Like many states, West Virginia’s alcohol excise tax is based on the percentage of alcohol present in the product. Below are the rates for common types of alcohol:
- Beer Tax - $0.20 per gallon
- Wine Tax - $1.00 per gallon
- Liquor Tax - State controlled sale of spirits
West Virginia taxes tobacco at two separate rates:
- Cigarette Tax - $1.20 per pack of 20 cigarettes
- Other Tobacco products - 12% of the wholesale price
Taxes on the wholesale price fall on the retailer who purchases tobacco products wholesale. But, often, retailers push this cost to consumers, so keep this in mind if you plan on purchasing tobacco products in West Virginia.
West Virginia imposes a tax on gasoline and other fuels. The tax is based on the type of fuel purchased and is added per gallon. The rate for a few more common types of gas include:
- Gasoline: 20.5 cents per gallon
- Diesel: 20.5 cents per gallon
- Liquid propane: 15 cents per gallon
- Natural gas: 13.2 cents per gallon
- Biodiesel: 20.5 cents per gallon
As of 2019, West Virginians no longer have to worry about paying a fee for not having healthcare.
The state does, however, impose a 3% tax on premiums collected from policyholders. Bear in mind that this cost may be transferred to the consumer in the form of higher premium rates.
Property taxes are imposed as a percentage of the assessed value of your home, real estate, or other property. The state of West Virginia does not impose a uniform rate of taxation, so each county decides the rate for its property tax.
Property taxes in West Virginia are very low overall. Because of the relatively low tax rate and inexpensive real estate costs, property taxes tend to be smaller portions of tax burden than income or sales tax. Some quick facts to know about West Virginia property tax include:
- The median West Virginian pays $464 on property tax.
- That’s just 1% of the median household income of $43,400
- That makes West Virginia’s property taxes the 48th lowest in the country.
How are property values assessed?
Property values are assessed based on the fair market value of the property. That basically means the fair price for which the property could be sold if it were up on the market. Every few years, the government sends assessors through towns and cities to assess the values of properties.
The market for housing, real estate, and commercial space is always in flux. It’s important to note that the value that your property is assessed at is likely to change year-to-year. As its value does up, so do taxes; and as it goes down, your tax rate does too.
It’s important to be aware of fluctuations in the real estate market in your area so that you know what your property taxes are likely to be, as they may have changed since the last time you filed.
The inheritance or estate tax is levied on assets left behind after someone passes away. If you, someone in your family, or any other loved one dies and intends to leave a sum of money, property, or investments to surviving friends or kin, you should know that it may be subject to the estate tax at the federal level.
As of 2019, the federal government tax code subjects estates exceeding $11.4 million to an estate tax. This will not apply to the vast majority of people – but if it does happen to apply to you, it’s good to expect it.
The state of West Virginia, However, does not impose an estate tax on its residents as of January 2005. So, if you are setting up a will, rest assured that the state will not tax any of the assets you intend to leave to your next of kin. Those who did receive assets from an estate prior to that date may still owe back taxes on it.
The most prominent tax credit that West Virginia offers is the Earned Income Tax Credit. This credit is similar to the federal program of the same name that offers some tax relief to working families with lower incomes.
- Families earning under $54,884 can earn up to $6,431 in tax relief.
Other tax credits in West Virginia include:
- Credits for small businesses
- Credits for job creators
- Credits for high-tech companies
- Credits for alternative fuel vehicles
- Adoption credit
- Historic building rehabilitation credit
A full list of credits and the conditions that you’ll need to satisfy to receive them can be found online.
While deductions reduce the amount of your income subject to tax, and exemptions exempt a portion of your income from taxation, tax credits are dollar-for-dollar reductions in the amount you pay each year. This can be a huge benefit for families who need a little extra cash to keep their finances in a comfortable place.
Tax exemptions make a portion of your income exempt from taxation. In effect, this lowers your tax bill at the end of the year. That means that, if you’ve been withholding taxes from your paycheck each month without factoring in an exemption, you may get money returned to you when you file in April.
The personal exemption in West Virginia is $2000, or $500 if someone else can claim you as a dependent.
The state also offers sales and use tax exemptions on certain items:
- College meal plans
- Contracting services
- Daycare services
- Medical implements like wheelchairs and prosthetics
- Educational summer camps
- Food stamp purchases
- Lottery tickets
A tax deduction is a reduction in the amount of income you are taxable for. This also decreases the total amount of tax you owe. However, unlike most states, West Virginia offers no standard deductions for workers, and also offers no itemizable deductions. Luckily, the overall tax burden in West Virginia is low, so the fact that there are no standard or itemized deductions shouldn’t break the bank.
Filing your taxes can be a headache, and can add extra stress if you’re hoping for a big return — or you’re worried about getting things right to avoid an audit. There’s plenty to remember, too, including personal income tax, property tax, and whatever exemptions or tax credits you may be claiming on your return.
In order to minimize stress and difficulty when preparing your taxes, be sure that you have these crucial items on hand:
- The prior year’s tax returns
- All W-2 forms from your employers
- Statements of earnings from any investments you’ve made
- Your social security number
- Proof needed for any exemptions, credits, or deductions you’re applying for
Remember, if you need a little extra help, Community Tax’s team of tax return experts are always available to make your life easier. Reach out to one of our professional tax experts today if you are unsure about filing your returns correctly.
When it comes time to pay West Virginia taxes, you have a few options:
- Web pay electronically online with your bank account.
- Pay with a credit card for a 2.5% service fee.
- Use a check, money order, or cashier’s check and mail with your return:
- West Virginia State Tax Department, PO Box 3694 Charleston, WV 25336-3694
- There’s a 6-month payment plan available for those who can’t pay the full amount upfront.
Now that you’ve slogged through all the gory details of West Virginia’s tax system, it’s time to reward yourself by considering some fun and fascinating fiscal facts!
- West Virginia’s motto is “mountaineers are always free,” a nod to its rugged natural environment.
- West Virginia would be the 62nd largest economy in the world if it were its own country.
- While West Virginia is the 2nd largest coal producer in the US (after Wyoming), coal only accounts for 2% of West Virginian jobs.
State taxes are not the end of your tax burden. Remember, you’re still responsible for filing federal taxes every year. Tax brackets and rules are different at the federal level than at the state level, so if you’re having any trouble navigating the complexities of federal taxes, reach out to a Community Tax representative! We can help you file and save with every deduction, exemption, and tax credit you deserve.
If you’re having a little trouble navigating the complicated systems of federal taxation, don’t hesitate to contact a Community Tax representative. Our experienced tax preparation experts are here to help you make the most of your yearly returns, so you pay only what you should while helping you avoid a costly and time-consuming audit.
This information is accurate as of 2019. Special circumstances that can affect your tax return may apply.
Sources: Ballotpedia, Tax Policy in West Virginia; DataUSA.io, West Virginia; New York Times, Today’s Energy Jobs are in Solar, Not Coal; Tax Policy Center, Alcohol Rates 2000-2010, 2013-2017; Tax Foundation, West Virginia, Individual Income Tax Rate and Brackets for 2018; Tax-Rates.org West Virginia Property Taxes by County; West Virginia State Tax Department, 2019 Motor Fuel Rates, Cigarette and Other Tobacco Products Excise Tax Increase FAQ, Individuals, Helpful Tips for Filing Your West Virginia Personal Income Tax Returns, Municipal Sales and Use Tax, Personal Income Tax Forms and Instructions, Sales and Use Tax Exemptions, West Virginia Tax Credits; West Virginia Legislature, Chapter 11: Taxation Chapter 60: State Control of Alcoholic Liquors;