Surprise! Your Online Seller Doesn't Collect Sales Tax, but That Doesn't Mean You Don't Owe It. Whether it's a retailer on the Web or a brick and mortar business across the state line, if the product or service you buy from them is considered a taxable good in the Commonwealth, chances are you could be breaking the law by not paying state taxes on these purchases.
Massachusetts, like 44 other states, has a tax on the sales price or rental charge of tangible property. The tax is due whether you purchase the property at a traditional retail store, over the phone or Internet or by mail order. Read full story on DOR's blog.
Check out our WebFile Mobile App if you need to get an extension for filing your personal income tax return after April 16, 2013. The app may be the most convenient for iPhone and Android smartphone and tablet users. It’s user-friendly and if you have to make a payment with the extension you can schedule an automatic debit from your checking or savings account. Anytime you can efile instead of mailing in a paper form saves DOR time and money.
Four more reasons to give up the paper return (including those 2D barcode forms which you print from tax software programs and mail to DOR instead of efiling.) Last tax year, DOR had to delay processing more than 30,389 paper/2D returns and correspond with taxpayers because:
- The Health Care Schedule was missing
- The Health Care Schedule was incomplete
- Other Schedules were missing
- Taxpayer forgot to sign
Efiling and WebFile for Income won’t let you make those mistakes.
Don’t Miss This- Senior Circuit Breaker! It’s the one state tax credit that puts the biggest refund in the pockets of anyone 65 years of age or older. If you own a primary home and pay property taxes or if you rent and meet income eligibility requirements, you could qualify for up to $1,000 off your tax bill. No tax bill? It’s a credit, so you still get the money. Check out Senior Tax Tips .
Don’t Miss This-Commuter Deduction! If you spend more than $150 a year to commute on the MassPike, MBTA transit, bus, commuter rail or commuter boat, don’t miss this state tax deduction. Last tax year, a quarter of a million state taxpayers used this deduction to reduce their taxable income by an average of $514. The deduction applies to E-Z pass accounts and weekly or monthly transit commuter passes. For details go to State Commuter Deduction
Don’t Even Think About It! Over the last two years our auditors disallowed more than $150 million dollars in business deductions and credits. One of the most reviewed is employee business expenses like travel and transportation expenses. We’re checking because there are differences between what MA and the IRS allow, so don’t even think about claiming a business deduction or credit if you don’t have the documentation to back up the claim.
Don’t Miss This! DOR is following the IRS and will not penalize fishermen and farmers if they are unable to pay their taxes by their usual March 1st deadline. Because of the delay in revising and printing federal tax forms that fishermen and farmers use, the IRS will waive the penalty for underpayment of estimated taxes so long as they file and pay by April 15th. For these same taxpayers, MA returns and payments can be filed without penalty up to April 16th. The exception to the state penalty is explained on Form M-2210 . If you qualify for this exception, be sure to include Form M-2210 with your tax return. For more information, see IRS Notice 2013-5.
Don’t Even Think About it! If you’ve ever had to replace a failed septic system, you know how expensive that can be. MA offers up to a $1,500 maximum credit a year for design and construction expenses to replace or repair a failed cesspool or septic system in your primary home. The credit is equal to 40% of the first $15,000 in expenses and is capped at $6,000. Any unused credit can be carried over five tax years. But don’t even think about going beyond the five years or exceeding the cap in claiming the credit. See other eligibility requirements at TIR 97-12 and TIR 98-8 (paragraph J).
Don’t Miss This! You may be entitled to a tax deduction equal to one half of the rent you paid during calendar year 2012 up to $3,000 for your principal residence in Massachusetts. Rent includes the amount you paid for heat, hot water, gas, electricity, furniture or parking, if the landlord makes no separate charge for these items. In tax year 2011, an estimated 818,726 taxpayers claimed the rental deduction reducing paying filers’ taxes by $117.8 million. See the Rent Deduction for details.
Don’t Even Think About It! Unemployment insurance is state assistance that can help you pay the bills, but it is considered taxable income even if you are out of work. The Commonwealth will send you a 1099 form for the amount in unemployment benefits you received last year, even if you had state taxes deducted from your weekly checks. Don’t even think about not reporting or under-reporting the amount of unemployment insurance you received in tax year 2012. The Department of Revenue shares databases with many different state agencies and regularly matches the amounts of unemployment benefits entered in line 8a of your state tax return with files from the Division of Unemployment Assistance. If you did have MA income tax withheld from your unemployment checks, be sure to include the correct figure on line 36 of your return.
Don’t Miss the Earned Income Tax Credit! If you qualify for this federal credit, you can also claim the Massachusetts credit which will refund you 15% of the computed federal credit. Many low to moderate income working individuals and families may forget to claim these credits, especially those who do not file a return because they may not owe taxes or have income taxes withheld from their pay. Go to the IRS EITC Assistant to see if you qualify and the DOR EIC Guide for more information on how to file.