Taxes - A summary for New Residents
Lower taxes and a lower cost of living are a refreshing change from many other states.
Moving to a new area is an exciting and adventurous time in someone's life. In addition to learning the new surroundings there are other things people should know of their new area. Taxes, for example, and how they are structured in South Carolina is something everyone should be aware of.
Income Tax
South Carolina's income tax structure is based on the federal income tax laws. South Carolina accepts the adjustments, exemptions and deductions allowed on your federal return with few modifications. Your federal taxable income is the starting point in determining your state income tax liability.
When you are comparing your own states to South Carolina, looking at the tax rates only will not serve you will. Examining the tax basis, exemptions, deductions and credits is a more efficient way to compare. Different states tax differently. For example, some tax Social Security others tax pensions. The best advice is to call the state revenue department of each state and ask for copies of their most recent income tax forms. Use these forms to determine how much income tax you will pay in those states.
The federal personal exemption is nbsp;2,350.00 for each dependent and the standard deduction is $ 6,200.00 for a married couple filing jointly. The personal exemption and standard deduction or itemized deductions subtracted from your income leaves you with the federal taxable income which is where you begin determining how much South Carolina income tax you will pay.
In addition to the exemptions and deductions allowed on the federal return, South Carolina also allows the following benefits:
South Carolina's individual income tax rates graduate from 3% to top rate of 7% on taxable income. The individual income tax brackets are adjusted annually to help offset the effects of inflation.
Real Estate Tax
The County Tax Assessor places an appraised value on your real estate, based upon comparable sales, the property's condition, etc. This appraised value is then multiplied by 4% for residents and 6% for non-residents and corporations, to determine the 'assessed value' of a property. The assessed value is then multiplied by the appropriate millage rate for your district. Residents that qualify for the 4% tax ratio are exempt from taxes imposed for school operating expenses. Therefore, the millage rates differ for non-residents and residents. For example: A resident with a $100,000 home in district 550 is $100,000 multiplied by 4% and then multiplied by .0935 ($4,000 x .0935=$374). For a non-resident multiply $100,000 by 6% and multiply that number by .1937 ($6,000 x .1937 = $1,162.20). It's important to remember that the information provided here is general in nature; if you have specific questions about your personal tax situation, you should check with:
County Auditor's Office in Beaufort Tax Assessors Office
(843)-470-2555 (843)-470-2522
www.bcgov.net www.sctax.org
(Or check with your personal accountant)
Hilton Head Island Transfer Fee
A real estate transfer fee of .25% (one quarter of one percent) is charged for each real estate transaction closed on Hilton Head Island. These funds are used by the town for the purchase of land for parks and undeveloped open space.
Sales and Use Tax
Beaufort County's sales and use tax rate is 7%. Individuals 85 and older are allowed a 1% discount. Prescriptions, dental prosthetics and hearing aids are exempt from the sales tax. A maximum sales tax of $300 is imposed on the purchase of motor vehicles, boats, motorcycles and airplanes.
Estate Tax
Estates left by a deceased individual are subject to tax in South Carolina. The first $320,000 of the estate is exempt from the tax and if an estate is below that value, you do not have to file a return. Estates are taxed at the amount claimed as a state credit on the federal estate return. Estates which are left to the deceased person's spouse are not subject to tax.
Gift Tax
There is no gift tax in South Carolina.
Part-Time Residents
If you moved to South Carolina during the year you are considered a part-time resident. As a part-time resident, you may file as a full-time resident or a non-resident. If you file as a full-time resident, claim all of your income as though you were a resident for the entire year and take a credit for any taxes paid in another state. As a non-resident, you should report only the income you earned in South Carolina. Your deductions and exemptions will be prorated by the same percentage as your South Carolina income compares to your total income. You may choose the method which benefits you the most. You may need to complete your return both ways to determine which option is best for you.
Information
For more information on all major South Carolina taxes, advisory opinions, tax forms and other helpful tax tips check the following sites:
South Carolina Department of Revenue
Income Tax
South Carolina's income tax structure is based on the federal income tax laws. South Carolina accepts the adjustments, exemptions and deductions allowed on your federal return with few modifications. Your federal taxable income is the starting point in determining your state income tax liability.
When you are comparing your own states to South Carolina, looking at the tax rates only will not serve you will. Examining the tax basis, exemptions, deductions and credits is a more efficient way to compare. Different states tax differently. For example, some tax Social Security others tax pensions. The best advice is to call the state revenue department of each state and ask for copies of their most recent income tax forms. Use these forms to determine how much income tax you will pay in those states.
The federal personal exemption is nbsp;2,350.00 for each dependent and the standard deduction is $ 6,200.00 for a married couple filing jointly. The personal exemption and standard deduction or itemized deductions subtracted from your income leaves you with the federal taxable income which is where you begin determining how much South Carolina income tax you will pay.
In addition to the exemptions and deductions allowed on the federal return, South Carolina also allows the following benefits:
- Beginning with the first year you receive retirement income, you may elect to make a $3,000.00 deduction annually until you reach age 65. At age 65, all residents are eligible for a deduction of up to $15,000 from income, regardless of the source. If you are already 65 when you first receive retirement income, the $15,000 deduction is automatic.
- Money received from Social Security is not taxable in South Carolina.
- Income received from National Guard or armed forces reserve pay is tax exempt.
- Disability income for a permanent total disability is deductible.
- There is not intangibles tax in South Carolina. Intangibles tax is collected in many states that do not have a general person income tax. The intangibles tax is imposed on bank accounts, interest, dividends, stocks, bonds and other assets.
- You do not pay a capital gains tax in this state on property you sell in another state. Federal rules governing capital gains also apply in South Carolina, including the one time gain of $125,000 allowed for the sale of your home if you are over 55.
- A two-wage earner credit allows married couples to take a minimum tax credit of $210 if both spouses work.
- A credit is allowed for income taxes paid to another state on income which is taxable in both states.
- You get an additional state income tax credit for child care or elderly care expenses.
South Carolina's individual income tax rates graduate from 3% to top rate of 7% on taxable income. The individual income tax brackets are adjusted annually to help offset the effects of inflation.
Real Estate Tax
The County Tax Assessor places an appraised value on your real estate, based upon comparable sales, the property's condition, etc. This appraised value is then multiplied by 4% for residents and 6% for non-residents and corporations, to determine the 'assessed value' of a property. The assessed value is then multiplied by the appropriate millage rate for your district. Residents that qualify for the 4% tax ratio are exempt from taxes imposed for school operating expenses. Therefore, the millage rates differ for non-residents and residents. For example: A resident with a $100,000 home in district 550 is $100,000 multiplied by 4% and then multiplied by .0935 ($4,000 x .0935=$374). For a non-resident multiply $100,000 by 6% and multiply that number by .1937 ($6,000 x .1937 = $1,162.20). It's important to remember that the information provided here is general in nature; if you have specific questions about your personal tax situation, you should check with:
County Auditor's Office in Beaufort Tax Assessors Office
(843)-470-2555 (843)-470-2522
www.bcgov.net www.sctax.org
(Or check with your personal accountant)
Hilton Head Island Transfer Fee
A real estate transfer fee of .25% (one quarter of one percent) is charged for each real estate transaction closed on Hilton Head Island. These funds are used by the town for the purchase of land for parks and undeveloped open space.
Sales and Use Tax
Beaufort County's sales and use tax rate is 7%. Individuals 85 and older are allowed a 1% discount. Prescriptions, dental prosthetics and hearing aids are exempt from the sales tax. A maximum sales tax of $300 is imposed on the purchase of motor vehicles, boats, motorcycles and airplanes.
Estate Tax
Estates left by a deceased individual are subject to tax in South Carolina. The first $320,000 of the estate is exempt from the tax and if an estate is below that value, you do not have to file a return. Estates are taxed at the amount claimed as a state credit on the federal estate return. Estates which are left to the deceased person's spouse are not subject to tax.
Gift Tax
There is no gift tax in South Carolina.
Part-Time Residents
If you moved to South Carolina during the year you are considered a part-time resident. As a part-time resident, you may file as a full-time resident or a non-resident. If you file as a full-time resident, claim all of your income as though you were a resident for the entire year and take a credit for any taxes paid in another state. As a non-resident, you should report only the income you earned in South Carolina. Your deductions and exemptions will be prorated by the same percentage as your South Carolina income compares to your total income. You may choose the method which benefits you the most. You may need to complete your return both ways to determine which option is best for you.
Information
For more information on all major South Carolina taxes, advisory opinions, tax forms and other helpful tax tips check the following sites:
South Carolina Department of Revenue
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Moving to South Carolina
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so_carolina_movingtosc.pdf |