Because of the latest installment of Ohio's 2005 tax reform, taxpayers will receive more money in their paychecks and less in their tax refunds.
A 4.2 percent decrease in income tax withholding rates for 2008 was another step of a 21 percent income tax cut, according to a news release from the Ohio Department of Taxation.
Ohio's new withholding rates mean that taxpayers will be keeping a little more of what they earn in their take-home pay this year
Tax Commissioner Richard A. Levin said in the release.
The withholding rate, which depends on how many exemptions a person claims, is part of the state income tax. When taxpayers claim zero dependents on their taxes, the maximum amount is withheld, and when taxpayers file their returns, they are likely to receive a refund, said Shawn Cutright, a tax specialist for the Ohio University Credit Union.
If someone earns less than or equal to $10,000 a year, that refund will be around $98, said Mike McKinney, a spokesman for the Ohio Department of Taxation. That amount is $4 less than the refund amount for 2007 because taxpayers will be receiving more money in their paychecks '- Strickland said in a news release. Working together with the legislature we are making sure Ohio is the best place in the nation to start a business and raise a family.
The tax reform also is phasing out the Corporation Franchise Tax, which McKinney said was too complicated and had too many exemptions, as well as the Tangible Property Tax, which taxed the furniture and fixtures in businesses.
Starting in 2005, the reform has been phasing in a Commercial Activity Tax '-
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Angie Weaver
Lower tax rates in Ohio took effect for pay periods ending on or after Jan. 1.
