The state of Utah uses a progressive tax system, which means that your tax burden increases as your income rises. Depending on your income, the state income tax rate ranges from 4.95% to 5.00%. To avoid having a big tax burden at the end of the year, Utah residents must have state taxes withheld from their paychecks.
You must fill out a Utah W-4 form to determine how much to withhold. Employers use this form to determine how much state tax should be deducted from your payment. Your filing status, the number of allowances, and any additional sums you wish to withhold are all requested on the form. The number of allowances you claim determines how much tax is deducted from your paycheck. When you submit your Utah state tax return, you can owe money in taxes if you make too many allowance claims.
You might also get a 1099-G form from the state of Utah if you’re self-employed or are paid as an independent contractor. Any unemployment compensation or state income tax refunds that you received during the tax year are reported on this form. The IRS might discover that you failed to record this income on your tax return, in which case you risk interest and penalty charges.
The third stimulus check was authorized by Congress and made law by President Biden in March 2021. Depending on the person’s salary and other conditions, the check might be worth up to $1,400. The COVID-19 pandemic’s effects on people and families were meant to be lessened financially thanks to the stimulus payment.
It’s crucial to understand that a 1099-G form differs from a W-2 form. Unlike a 1099-G form, which is used to report government payouts like unemployment benefits or state tax refunds, a W-2 form only discloses your earned income and taxes your employer has withheld. Both documents are crucial for appropriately filing your tax return and preventing any fines or interest that might apply.
In conclusion, a Utah W-4 form must be filled out in order to calculate state tax withholding in Utah. To prevent having to pay taxes at the end of the year, it’s critical to accurately disclose your filing status, the number of allowances, and any additional amounts you choose to withhold. To avoid fines and interest, make sure to declare any government payments on your tax return if you receive a 1099-G form. While a W-2 form, which details your earned income and taxes deducted by your employer, and a 1099-G document are both necessary, they are not the same.