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A personal income tax exemption allows a portion of Massachusetts filers' salary to be deducted from the income tax they owe. Check for additional tax exemptions, including those for nonresidents and part-year residents, legal blindness and medical and dental expenses.
Claiming 1 reduces the amount of taxes that are withheld from weekly paychecks, so you get more money now with a smaller refund. Claiming 0 allowances may be a better option if you'd rather receive a larger lump sum of money in the form of your tax refund.
Unlike other states, Massachusetts does not have a state standard deduction. Instead, state taxpayers can determine if they qualify for certain tax exemptions to reduce the amount of tax owed.
(For more information on taxable income, refer to ?Policy Basics: Marginal and Average Tax Rates.?) For example, a $100 exemption or deduction reduces a filer's taxable income by $100. It reduces the filer's taxes by a maximum of $100 multiplied by the tax rate the filer would have faced on that $100 in income.
You should claim the total number of exemptions to which you are entitled to prevent excessive over-withholding, unless you have a significant amount of other income. If you expect to owe more income tax than will be withheld, you may either claim a smaller number of exemptions or have additional amounts withheld.
If you are single and have one job, or married and filing jointly then claiming one allowance makes the most sense. An individual can claim two allowances if they are single and have more than one job, or are married and are filing taxes separately.
Notice of Intent to Assess (NIA) The NIA is an audit notice that is issued when the DOR believes you owe additional taxes. The NIA will identify the reason DOR believes your tax should be increased. The NIA is not a tax bill; it shows the amount you will owe if you do not dispute it.
In addition, passive losses allowed for Massachusetts tax purposes in 1987, but carried over for U.S. tax purposes, cannot be used again for Massachusetts tax purposes when such carryover losses are eventually allowed for U.S. tax purposes.