How to Calculate Pennsylvania State Income Tax

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Calculate Pennsylvania State Income Tax
Calculate Pennsylvania State Income Tax

How to Calculate Pennsylvania State Income Tax. The state of Pennsylvania has a simplified income tax system, using a single tax rate for all incomes. To calculate what you owe, you'll have to figure out how much of your income qualifies for taxation before applying the state income tax rate.

Things You'll Need

  • Calculator
  • Tax preparation professional (recommended)
  • W-2 form

Total Your Taxable Income

Refer to the W-2 statement your employer will mail to you when tax season begins. It will show the total amount of money you were paid by the company in the past year. It will also include information on any federal and state taxes that were automatically deducted from your paychecks.

Tally up your year's earnings if you are a self-employed individual or small-business owner. If you are, there are strategies available to you to limit the amount of income you'll have to claim as personal. Work with a tax professional if you need some guidance.

Find out what tax deductions you are legally allowed to subtract from your yearly income. Business owners usually qualify for deductions in several categories, as do the self-employed and the providers in households with dependents.

Calculate your taxable income. To do this, you will subtract the grand sum of all the deductions you can claim from the figure you arrived at when you counted up your annual income. Remember to include income from all sources, including capital gains, gifts, grants, prize winnings and anything else considered personal income by federal and state law.

Apply the Pennsylvania State Tax Rate to Your Taxable Income

Use Pennsylvania's flat tax rate of 3.07 percent to calculate the amount of tax you owe.

Multiply your taxable income by 0.0307, which is the decimal expression of the 3.07-percent tax rate. To use an example, a taxable income of $47,500 would pay the government $1,428.25 (47,500 x 0.0307 = 1,428.25).

File your tax return by the April deadline to avoid penalties.

Tips & Warnings

  • It can pay to hire a tax preparation specialist to help you figure out your taxable income and total your deductions. The cost of the service may be recouped through tax savings.
  • You risk the imposition of severe penalties if you are found guilty of income tax evasion at the state or federal level. These penalties include fines and possible incarceration.

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