Wisconsin Income Tax Exemptions

If you live in Wisconsin, it’s important to understand the state’s income tax. You can do this by examining the different deductions and credits that can lower your taxes. In addition, you can also learn more about the state’s tax brackets and rates. The tax laws in Wisconsin are complex, but there are several deductions available to help reduce your bill. For example, you can deduct contributions to a college savings account such as Edvest or Tomorrow’s Scholar. You can also subtract interest earned on commercial loans made by banks that do business in the state. Under Wisconsin law, financial institutions can exclude loan income from state income tax if the borrower lives or works in the state. The state also exempts interest earned on investments made by Native American tribes.

Wisconsin Deductions

In addition to standard deductions, the state offers a credit for eligible federal itemized deductions. This credit is equal to 5% of the difference between the eligible federal itemized deductions and the Wisconsin standard deduction. Eligible federal deductions include interest paid, gifts to charity, medical and dental expenses, and casualty losses.

Employees should complete the W-4 form to let their employer know how much Wisconsin tax they want withheld from their paychecks. If an employee changes their filing status or withholding amount, they should submit a new W-4. Employees should also complete the W-9 form to provide their name and address. They can pay their state taxes with direct deposit or use the DOR’s e-file system.

Wisconsin Personal Exemptions

The state of Wisconsin has a progressive statewide income tax, meaning that it has higher rates at higher levels of income. There are also a variety of deductions available to taxpayers, including a standard deduction that is based on your filing status and income level.

In addition, the state offers a personal exemption of $700 for single filers or $1,168 for married couples who meet specific income requirements. In addition, residents age 65 and over can subtract up to $5,000 of retirement income from their taxable income. To qualify, you must have a federal adjusted gross income (AGI) under $15,000 for single filers and heads of household or $30,000 for married filing jointly.

Retirement income such as pensions, annuities, and money withdrawn from IRAs and 401(k)s is taxable in the same way that it is taxable for federal purposes. However, social security benefits and railroad retirement benefits are not taxable. Wisconsin does not tax interest and dividends but tax capital gains. This includes stocks, mutual funds, real estate, and personal property.