An Overview of Mississippi State Taxes
It’s important to know how much you owe in federal income taxes and also what you may be responsible for in state taxes. If you live in Mississippi, you may need to pay state income taxes and property taxes to ensure you follow local regulations.
Understanding the tax regulations that apply to you and paying the correct amount at the right time is crucial. If you don’t follow these tax laws, the federal or state government may impose serious consequences, such as interest charges and late payment penalty fees. The Internal Revenue Service (IRS) could take further action if you don’t pay the right taxes and may garnish your wages, intercept your tax refund, or seize your assets.
Use this guide to review valuable information on current tax laws and regulations in Mississippi and helpful advice on how to file your taxes. When you understand the tax guidelines as they apply to your situation, you can calculate your state taxes properly and file your tax returns on time.
Table of Contents
Mississippi State Income Tax
If you earned income in Mississippi, you owe state income taxes in addition to federal income taxes. The state adheres to a graduated tax rate, which means the tax rate you pay increases as the amount of income you earn increases. With this type of tax rate, the following applies:
|Taxable Earned Income||Tax Rate|
|Less than $1,000||0%|
|Between $5,001 and $10,000||4%|
|More than $10,001||5%|
For example, if you’re an individual tax filer who earned $30,000 for the year, your Mississippi state income tax is calculated in this manner:
$1,000 times 0% = $0;
$4,000 times 3% = $120;
$5,000 times 4% = $200;
$20,000 times 5% = $1,000;
Total state income tax liability: $1,320.
Your tax liability is calculated using the taxable income you earned throughout the year as a state resident, non-resident, or part-year resident.
Tax Exemptions and Deductions
Depending on your filing status, age, or other criteria, according to the Mississippi Department of Revenue you may be eligible for certain income tax exemptions. For example, if you’re the head of a family with at least one dependent, you may claim an $8,000 exemption. If you’re a taxpayer older than 65, you may qualify for a $1,500 income tax exemption. As a single filer, you may be eligible for a $6,000 exemption.
You can use the same income tax deduction you claim on your federal income taxes, but you can’t claim state income taxes as a deduction. The tax deduction amounts you qualify for in Mississippi vary based on your filing status and are as follows:
- Married and filing jointly with a spouse: $4,600;
- Married but with a deceased spouse: $ 4,60?0;
- Married but filing separately: $2,300;
- Filing as the head of the family: $3,400;
- Single filer: $2,300.
Mississippi Sales Tax
Mississippi imposes a state sales tax on the purchase of certain goods and services. In most cases, the sales tax rate is 7%, but it can vary depending on the type of goods or services purchased. For example:
- Automobiles and light trucks (under 10,000 pounds): 5% sales tax;
- Alcoholic beverages and beer: 7% sales tax;
- Electricity and fuels for residential use: 0% sales tax;
- Telephone service: 7% sales tax;
- Admission to an event held at publicly owned facility: 3% sales tax;
- Renting a motor vehicle for less than 30 days: 6% sales tax.
If you purchase goods or services and the sales tax wasn’t applied, such as through an online or catalog retailer, you’re responsible for paying a use tax for the transaction. A use tax usually applies when you’re dealing with a seller who’s out of state, not registered in Mississippi, and unable to file taxes with the state.
The use tax rate is the same as the sales tax rate that would have been applied to the transaction if the seller was located in Mississippi. The seller is responsible for charging the use tax and delivering it to the Mississippi Department of Revenue.
Mississippi Property Taxes
If you own property in Mississippi, you must pay property taxes every year. The tax money you pay the state is used to fund local school districts, as well as city and county governments.
A county assessor evaluates your property to determine its value once every four years. Your home’s value and the local tax rate are used to calculate the property taxes you owe. Your local county, municipality, and school districts set the tax rate based on the funding needed at the time, so your rate may vary.
Your local tax collector also uses an assessment ratio to calculate the property taxes you owe. To determine your assessment ratio, your property is classified as one of the following:
- Class I (single-family, owner-occupied residential property): 10% tax rate;
- Class II (other real property that doesn’t qualify with Class I or Class IV): 15% tax rate;
- Class III (personal property, except Class IV property or motor vehicles): 15% tax rate;
- Class IV (public service property that’s been assessed by the state or county, except airline or railroad property): 30% tax rate;
- Class V (motor vehicles): 30% tax rate.
You receive a property tax bill by mail. These taxes are due on or before February 1 for property that was accessed the year before.
A homestead exemption is a property tax exemption for homeowners who use their property as their primary residence. If you qualify for homestead exemption, $7,500 of your home’s assessed value is not factored into your tax calculations. You could save up to $300 on your property taxes. To learn about specific local eligibility requirements for this exemption, contact your county tax collector.
Mississippi Estate Taxes
An estate tax is a tax imposed on the value of property and assets after a taxpayer’s death; an inheritance tax applies when an executor transfers the decedent’s estate to heirs. Mississippi doesn’t charge an estate or inheritance tax. However, at the federal level, if the estate’s value totals $11,580,000 or higher, the estate’s executor must file an estate tax return form with the IRS.
Tips for Filing Taxes in Mississippi
Both your federal and state income tax returns and payments are due by April 15. The Mississippi Department of Revenue provides information on several trustworthy companies that can help you file your state taxes online. If you’re looking for assistance with your Mississippi taxes, the IRS offers contact information for all taxpayer assistance offices located in the state.
It’s important to review the due dates for the taxes you owe, as well as how these taxes are calculated. When you pay your taxes in full and on time, you’ll avoid interest, penalty fees, and other consequences the government may impose.
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This post was updated January 28, 2020. It was originally published January 23, 2020.