Indiana State Taxes: A Simple Guide

🏀Indiana state & county income tax

Indiana taxes personal income at the state level and also requires most residents to pay an additional county income tax. In general:

• •Residents must file an Indiana income tax return if they exceed certain income thresholds.
• •Nonresidents may need to file if they earn Indiana-source income.
• •Indiana's definition of taxable income and credits differs from federal rules.
• •County income tax is based on your county of residence on January 1 of the tax year.

You will typically file a federal Form 1040 and an Indiana return, which includes county tax calculations.

🛒Sales and use tax

Indiana has a statewide sales tax that applies to many retail purchases, though local governments do not add their own sales taxes on top.

• •Most tangible goods are taxable.
• •If you buy taxable goods online or out-of-state without tax, you may owe use tax to Indiana.
• •Some items may be exempt or taxed differently.

Indiana businesses must collect and remit sales tax on taxable sales.

🏡Property taxes

Indiana's property taxes are assessed and collected by counties and local governments, based on the assessed value of real property like homes and land.

• •Homeowners receive property tax bills from their county.
• •Rates vary by county, school district, and other taxing entities.
• •Indiana offers certain property tax deductions and credits, especially for primary residences.

🔗Putting Indiana taxes together

A typical Indiana resident may deal with:

• •Federal income tax (Form 1040)
• •Indiana state income tax
• •County income tax
• •Statewide sales and use tax
• •County-level property taxes if they own a home

Once you understand basics like how to file taxes, adding Indiana's rules becomes much easier.