Ohio Department of Taxation Ohio Income Tax

New for the 2008 Filing Season

Every filing season brings with it some new wrinkles to Ohio's tax laws.

Below is a list of major changes to keep an eye out for when filing tax returns for the 2008 taxable year. We've also included tips designed to help this filing season go more smoothly for taxpayers.

Remember, the deadline to file a return is April 15, 2009.

What's new for 2008:

• Lower tax rates: The 2008 state income tax tables include a 4.2 percent cut across all income tax brackets when compared to the previous tax year. This round of cuts represents the fourth year of a five-year plan to reduce state income tax rates by 21 percent across all brackets. See tax rates here.
• New military retirement pay tax exemption: Retired military and their survivors may now deduct their military retirement pay in arriving at their Ohio adjusted gross income. Federal civil service retirees who received credit for their military service may also deduct the portion of their pension that reflects that service. This deduction begins with the 2008 taxable year. For details, see Frequently Asked Questions - Military - Question #3.
• Larger personal exemption: The personal and dependent income tax exemption increased to $1,500 for the 2008 taxable year, up from $1,450 for 2007.
• Larger medical savings account deduction: This deduction permitted for funds deposited into an Ohio Medical Savings Account increased to $4,048 for the 2008 taxable year, up from $3,944 in 2007.
• Municipal income tax: Some municipalities have different tax rates for 2008. Look up yours here.
• School district income tax: Did the tax rate in your school district  change last year? Click here for the updates in your school district. Click here for a complete list of school districts with an income tax.

 

Tips for taxpayers:

• Cut through the red tape. File electronically. Ohio now offers four different ways to cut to the front of the line and get your refund fast. To learn more about each option and decide which one is right for you, check out Ohio's electronic filing options.
• Direct deposit ensures a faster refund. If you file electronically and elect to have your refund deposited directly into your bank account, you can generally expect to receive it within five to seven business days. But be sure to verify your routing and accounting number with your financial institution before you submit your return.
• Don't forget about local taxes. Many cities and villages, as well as an increasing number of school districts, levy an income tax. If you're unsure of your municipality or school district, look up your address in The Finder.
• Make sure we have your correct address. If you use a tax preparer to file your return electronically, make sure that your current address is on file with the preparer. If you have moved since last year's filing, your preparer may need to update your mailing address with us. Otherwise, your refund may be returned to us as "undeliverable."

• Be complete. Don't forget to:

  • Include W-2s and mailing a return. Also, send – if applicable – the schedules used to calculate deductions, additions and credits.
  • Include your school district number on your return.
  • Calculate Ohio use tax (see page 29 of the Ohio 2008 income tax instructions).
  • Send the IT 40 payment voucher and check, if you owe tax – and include the last four digits of your social security number, as well as the tax year, on your check.
  • Sign and enclose all four pages (if you're mailing a paper return).
• Check your math. Math errors slow down the processing of refunds. Also, remember that the federal adjusted gross income listed on your federal tax return must match the federal adjusted gross income listed on your state tax return(s). In order to avoid math errors, you may want to consider an electronic filing option such as eForms, which takes care of most of the math for you.
• Keep good records. It's best to retain copies of your tax forms and associated paperwork for four years to help settle any discrepancies.
• Remember: We can work with your tax preparer, too. Taxpayers can authorize their tax preparer to contact the department to resolve issues regarding their return. If you want your tax preparer to be able to talk to us, list your preparer's name in the space provided below your signature on the return and check the box indicated below his/her name to allow us to discuss your return.
• Remember: You might not have to file. Some senior citizens on fixed incomes and taxpayers whose personal and dependent exemptions exceed their taxable income may not have to file a state income tax return. See "Generally, you do not have to file..." on our Who Must File page.
• Don't forget about the low income tax credit. Any Ohio resident whose income is $10,000 or less is allowed a credit equal to the amount of tax they would owe, which means they will not have to pay any tax. Eligible taxpayers must file in order to take the credit, which is on line 53 of Schedule B of the Ohio IT 1040.
• Don't forget about the federal earned income tax credit. Working individuals and families who earn modest incomes may be eligible for the earned income credit on their federal returns, which could result in a refund that these taxpayers might otherwise receive. To find out the eligility rules and how the credit works, see the EITC information page on the IRS Web site.