Over 80% of state taxpayers use standard deductions

Matt Pommer  Wisconsin Newspaper Association

‘Tis the season for tax forms and bills to start showing up in your mailbox.

Most local governments are in the process of mailing their bills, a move which allows property owners the option of paying the tab in either calendar year 2013 or 2014. The issue for many is how the property-tax payments could affect their federal income tax.

The total taxable value of property in Wisconsin has declined slightly this year, from $471.1 billion to $467.5 billion, according to the Wisconsin Taxpayers Alliance. The numbers reflect the estimates of property last Jan. 1. The total property value had peaked at $514.4 billion in 2008.

Values fell eight-tenths of one percent in 2013. It marketed the fifth consecutive year of decline, something unprecedented in recent Wisconsin history. Some 45 of the state’s 72 counties showed declines, but west-central parts of the state seemed to show the greatest promise.

Across the state, residential values accounting for 70 percent of property totals were down 1.4 percent, and agricultural values dropped 3.7 percent. All classes of business property showed value increases. The Alliance had a simple explanation.

“Much of the difference between business properties and others is rooted in family economic stress and increased home foreclosures. As the supply of unsold residences rose and foreclosures held down prices, home, farm and some recreational property suffered,” it explained.

The housing market has improved in most parts of the state this year, and the Alliance suggested that next year’s figures will again be showing gains.

The time for complaining about the value assigned to your property by assessors is long gone. Appeals usually are heard in the spring, allowing them to work their way through the system.

But the personal calculations are underway for the income-tax issues. The stock market showed some downturns in December, and analysts suggested that might reflect locking in of values for 2013.

Wisconsin income tax statistics change little from year to year. More than four of every five filers – that is, about 82 percent or 2.38 million taxfilers – use the standard deduction on their state returns.

That reflects the fact that Wisconsin does not allow deductions for property taxes paid like the federal government does. Instead, Wisconsin provides up to a $300 credit. It is available to renters as well as property owners.

The latest tax report shows that about half of those filing returns reported adjusted gross incomes of less than $30,000. These folks had 11.3 percent of the taxable income, but they paid just 3.8 percent of the amount collected.

This reflects the progressive nature of the Wisconsin personal income-tax system. This group includes many who received refundable, earned-income tax credits and those who are eligible for homestead property-tax relief credits. These credits go to lowincome households. Also in this group are those who reported losses or who are dependents claimed by others.

Those with incomes between $30,000 and $70,000 represented 28 percent of returns and reported 27.1 percent of income, but paid a slightly smaller portion – 22.9 percent – of percent of taxes collected.

The wealthy often complain about state income taxes. The 2.1 percent of filers who reported adjusted gross incomes greater than $200,000 had 27.1 percent of the income and paid nearly 30 percent of the taxes.

Included in that group were 3,940 returns indicating income in excess of $1 million. They reported a total of $11.4 billion in income, and paid $735.9 million – some 11.5 percent – of personal income tax paid to the state.

Whatever your taxes are, don’t forget to meet the deadlines. The penalties can be expensive.

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