State governments use taxpayer dollars to fund road maintenance, law enforcement agencies and other public services. The funding for those services typically comes from three key areas: property taxes, sales taxes and income taxes.

Why does Turbo tax say tax due?

Federal tax due means that you owe that amount and must pay it to the IRS. You are not getting a federal refund.

Do you have to pay local and state taxes?

Local taxes are in addition to federal and state income taxes. Local income taxes generally apply to people who live or work in the locality. If the local income tax is a withholding tax, then you are required to withhold it from employee wages. Or if the local income tax is an employer tax, you must pay it.

How do I pay state and local taxes?

Learn how to pay your state taxes and find out about resources in your area that can help you through the process. The amount of state and local income tax you pay will depend on how much income you earn and the tax rate of the state or locality where you live.

What do you mean by local income tax?

Local governments in several states impose a local income tax. Local taxes are in addition to federal and state income taxes. Local income taxes generally apply to people who live or work in the locality. As an employer, you need to pay attention to local taxes where your employees work.

What kind of services do local taxes pay for?

Local tax revenue also helps support area schools and maintain county and city parks and natural resources. When considering where tax dollars go, think about the public services that local, state, regional and national agencies provide for the community as a whole. This includes helping fund police and fire departments.

What are some things that state taxes pay for?

There are a number of unfunded federal mandates related to the environment, such as the Clean Air Act, that the federal government expects states to enforce, but for which it provides no set funding. Most hospitals and clinics are generally funded by local taxes, although states may allot money to help local governments.