How Much Are the Taxes in Pennsylvania?

Consider taxes when making your budget. No matter where you live, taxes can have a big influence on your quality of life and the amount of income you get to keep. If you are planning to move to the Commonwealth of Pennsylvania, you should be aware of the tax rates citizens must pay. Residents of Pennsylvania face taxes on a number of levels, from the state income tax and sales tax to property taxes and local taxes.

When you make a purchase in the Commonwealth of Pennsylvania, you pay a sales tax rate of 6 percent. Clothing items and most food are exempt from this state tax rate, although the state does impose a tax on sodas, chips and other items considered to be junk food.

The Commonwealth of Pennsylvania uses a flat income tax rate, as opposed to the graduated taxes used by the Federal government. No matter what your level of income, you can expect to pay a tax rate of 3 percent. The Commonwealth taxes wage income, as well as interest, dividends, capital gains and business income. Taxpayers in the Commonwealth can file their returns electronically and over the telephone as well as on paper.

If you own property in Pennsylvania, you must pay taxes on that property each year. In Pennsylvania real estate taxes are used to fund the public school system, and each school district imposes its own taxes based on the value of the homeowner's property. The amount of property taxes varies from location to location, but affluent parts of the state tend to have higher rates than poorer and more rural areas. It is always a good idea to ask your realtor for current property taxes on any home you are considering.

Each municipality in the Commonwealth of Pennsylvania is free to impose its own local tax. The tax rate varies from location to location, but as of 2011 it generally runs between 1 and 2 percent of income. If you are planning to move into the state it is a good idea to contact the municipality or town where you plan to live and ask about the tax rate, since these rates are always subject to change.

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Does Disability Income Count on Your Federal Taxes?

Benefits are available to those with permanent and temporary disabilities. Disabled Americans may qualify for assistance from a number of sources, including the federal government, state agencies and the workplace. Answering the question of whether the federal government imposes taxes on disability income depends upon the specifics of the situation involved. The federal government requires that everyone file income tax returns and bases individual tax rates on a number of considerations. In the case of disability, the factors include the type of benefits involved and the recipient's income levels.

Though disabled individuals qualify for certain tax benefits under U.S. federal law, the Internal Revenue Service (IRS) requires disabled individuals to file tax forms. When disabled individuals file income tax returns, these individuals include all streams of revenue on the return. For instance, an individual may receive state benefits for a temporary disability for six months and receive income from work for the other six months of the year. The IRS imposes on tax rate on this individual based on total income earned, rather than imposing separate tax rates for disability income and work income.

The federal government provides a tax credit designed specifically for elderly or disabled American citizens and legal residents. This credit exempts low-income individuals aged 65 or older, those receiving taxable disability income, or individuals suffering from permanent or total disability from paying a certain amount of taxes. The IRS bases the availability of this tax credit on the amount of an individual's adjusted gross income (AGI), as calculated using IRS tax forms. To take advantage of the credit, maximum AGI amounts range from $12,500 to $25,000, depending on considerations such as filing status and dependents. Tax credits range from $3,750 to $7,500.

Ultimately, the answer to the question of whether disability income counts on your federal taxes is "yes." Even if you don't end up paying taxes on your disability benefits, you must include them on your tax return. If the IRS grants you a tax credit on account of your status as disabled, retired, or both, that credit applies to all income earned, not just disability income. State disability benefits, such as California's State Disability Insurance, prove subject to federal taxation as well. A few exceptions apply, notably to disability pensions received by military personnel, police officers and firefighters, which are tax-free but still must be declared on tax returns.

Writing on behalf of the Hepatitis C Support Project, author Jacques Chambers suggests that the complexities of taxation and disability in the United States may require the disabled to seek assistance. According to Chambers, employing the assistance of a tax consultant or expert helps the disabled pursue tax breaks to the full extent of the law. This process requires more extensive action than simply filing standard tax forms and proves somewhat difficult. Nonprofit groups such as the Hepatitis C Support Project help the disabled locate such assistance, while the IRS offers free tax preparation services to low-income individuals incapable of preparing their own returns.

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Can I Claim Interest Paid on a Contract for a Deed on Taxes?

A land contract, also called an installment land contract for a contract for deed, is a way for a seller to finance a real estate purchase on behalf of the buyer. After the parties agree on a price, the buyer makes a down payment, takes occupancy and begins making regular "mortgage" payments to the seller, including interest.

In the installment sale, the buyer's payments include principal and interest, in addition to property taxes and hazard insurance if an escrow account has been established for these payments. Even though a land contract doesn't require the seller to transfer the deed until the buyer makes payment for the property in full, the Internal Revenue Service considers the buyer as owner for tax treatment purposes. As a result, the land contract buyer is eligible to deduct the annual interest expense from his income on his taxes.

In addition to deducting the "mortgage" interest, the buyer is also able to deduct property taxes, which she is responsible for and must pay in full, along with hazard insurance. If the buyer makes eligible capital improvements, that cost may be deducted as well. Eligible improvements include energy efficient window and doors, among other projects. The seller only acts as the bank and does not bear any financial responsibility toward the home, unless he has his own mortgage on the property to satisfy. Repairs, maintenance, improvements, taxes and insurance are all administered and paid for by the buyer.

The seller in a land contract transaction has some tax advantages as well. Although the seller must report the interest he earned on the deal as income -- and has to pay ordinary taxes on it -- he is able to spread out any gain he made on the property's value over the life of the installment agreement. If the total gain exceeds the maximum exclusion allowed by the IRS, this can result in significant tax savings.

The land contract ends when the buyer pays for the home in full. This can be accomplished in a few ways. The first and most common event occurs when the buyer secures a new home loan that pays off the seller in full at the end of the contract. Land contracts are typically short and range anywhere from two to 10 years. The second event occurs when the buyer simply pays the seller in full without having to take a new loan. Both of these options result in the transfer of the deed to the buyer. In the third case, the buyer decides to sell; when this happens, she is entitled to a return of her accumulated equity.

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