Maryland State Taxes: 2024 Update

(February 2025)

In This Article

Stay up to date on Maryland state taxes for 2024 to avoid any unexpected issues when filing. Whether you’re an individual or a business owner, knowing the latest tax brackets, deductions, and credits is crucial to keeping more money in your pocket. This year, there are notable updates to both income and sales tax rules that you need to be aware of. Also, don’t overlook local taxes, which can differ by county or city. If you’re responsible for estimated payments, property taxes, or business taxes, understanding these areas is key to staying compliant. Let’s explore the new changes for Maryland taxpayers and how you can take advantage of tax breaks and opportunities in 2024.

1.  Understand Your Tax Filing Status

Determine your correct tax filing status in Maryland for 2024 to ensure accurate tax reporting and potential savings. Whether you’re filing as single, married filing jointly, married filing separately, or head of household, your status affects your tax brackets, deductions, and credits. If you’ve experienced major life changes, like marriage, divorce, or having a child, it’s crucial to update your status.

 

Choosing the right one can lower your tax bill and even increase your refund. For married couples, consider whether filing separately or jointly will provide the best financial benefit. Make sure to select the status that reflects your situation, so you’re not missing out on any tax advantages Maryland offers.

2.  Calculate Your Taxable Income

Calculate your taxable income in Maryland for 2024 to ensure you’re paying the correct amount of taxes. Start by gathering your total income, which includes wages, self-employment earnings, interest, dividends, and any other sources. Then, subtract any allowable deductions, such as retirement contributions, student loan interest, and specific business expenses.

 

Don’t forget to include Maryland-specific deductions, like the standard deduction or itemized deductions if they apply to you. Once you’ve subtracted these deductions from your total income, you’ll arrive at your taxable income. Understanding this figure is crucial, as it determines your tax liability. Take the time to calculate accurately so you can maximize deductions and minimize your tax burden this year.

3.  Deduct Allowable Expenses

Reduce your taxable income and lower your 2024 Maryland tax bill by claiming allowable expenses. Begin by identifying eligible deductions such as mortgage interest, property taxes, medical expenses, and charitable donations. If you’re a business owner, be sure to include deductions for business-related expenses like supplies, travel, and home office costs. Maintain detailed records and receipts to back up your claims.

Depending on your situation, you can either take the standard deduction or itemize—choose the option that provides the greatest benefit. Maryland offers specific deductions that can significantly impact your taxes, so be sure to review all possible expenses to maximize your deductions and save more this tax season.

4.  Calculate Your Maryland State Tax

To determine your Maryland state tax for 2024, figure out your taxable income, which is your total income minus allowable deductions. Then, consult the Maryland tax brackets to identify your applicable tax rate. Multiply your taxable income by this rate to calculate your initial tax liability.

Be sure to factor in any tax credits you may qualify for, as these can significantly lower your final tax bill. If you’re self-employed, remember to include self-employment taxes in your calculations. Take the time to review your numbers for accuracy, and consider using tax software or seeking assistance from a tax professional if needed to ensure everything is correct.

5.  Estimate Your Tax Refund or Payment

Get a handle on your tax refund or payment for 2024 to plan your finances effectively. Begin by calculating your total tax liability based on your taxable income and the applicable tax rate. After that, subtract any withholding amounts from your paycheck and any estimated tax payments you made during the year.

If your withholdings and payments exceed your tax liability, you can anticipate a refund. Conversely, if they fall short, prepare for a payment due. To gain a clearer understanding, use online tax calculators or tools that help project your refund or payment accurately. This proactive approach allows you to manage your budget, avoid surprises, and ensure you’re ready for any tax-related expenses when filing your return.

6.  File Your Maryland Tax Return

Submit your Maryland tax return for 2024 to fulfill your tax responsibilities and steer clear of penalties. Collect all essential documents, such as W-2s, 1099s, and any records for deductions or credits you intend to claim. Decide how you want to file—either electronically using tax software or by mailing a paper return.

If you choose to file online, carefully follow the prompts to ensure all information is accurate. For those filing by mail, double-check your calculations and include all required forms. Make sure to file by the April deadline to avoid late fees. If you need more time, consider applying for an extension. Once submitted, retain copies of your return and supporting documents for future reference.

7.  Pay Your Tax Liability

To pay your Maryland tax liability, start by determining the exact amount you owe, which will be shown on your tax return. You can choose to pay online using the state’s electronic payment system, or you can mail a check or money order if you prefer. If paying online, make sure you’re using a secure portal to protect your information.

If you’re unable to pay the full amount right away, consider setting up a payment plan with the Maryland Comptroller’s Office to avoid additional penalties. Be proactive about making your payment before the due date to stay compliant and avoid unnecessary fees.

8.  Understand Maryland’s Tax Credits

Familiarize yourself with Maryland’s tax credits to maximize your savings when filing your taxes. Identify the various credits available, such as the Earned Income Tax Credit, Child Tax Credit, and the Maryland Homestead Tax Credit. Each credit has specific eligibility requirements, so review them carefully to ensure you qualify.

 

Take advantage of credits for education expenses and certain energy-efficient home improvements, as these can provide significant financial benefits. Be mindful of deadlines for applying for these credits to ensure you don’t miss out. Consider consulting with a tax professional if you’re unsure about your eligibility or how to claim them. Understanding and utilizing these credits can greatly reduce your tax liability and keep more money in your pocket.

9.  Address Tax Audits and Appeals

Prepare for a tax audit or appeal in Maryland by understanding the process and taking proactive steps. If you receive an audit notice, don’t panic—carefully review the details and gather all the documents requested, such as receipts, tax returns, and records supporting your deductions or credits. Respond to the notice within the given deadline to avoid further complications. If you disagree with the audit findings, you have the right to file an appeal.

Submit your appeal promptly and ensure you provide any additional information that may strengthen your case. Stay organized, keep thorough records, and consider consulting a tax professional for guidance throughout the audit or appeal process. Addressing audits efficiently can help resolve issues quickly and avoid extra penalties.

10.  Stay Informed About Tax Law Changes

Keep yourself updated on tax law changes to ensure you’re filing correctly and taking advantage of any new benefits. Tax regulations can shift from year to year, affecting deductions, credits, and tax rates. Regularly check for updates from the Maryland Comptroller’s Office or IRS, especially if you’ve experienced life changes like a new job, marriage, or buying a home. Subscribe to newsletters or alerts to stay informed. Staying on top of these changes helps you avoid mistakes, ensures compliance, and might even save you money. Don’t wait until tax season—be proactive about understanding new tax laws throughout the year.

Recap

To stay on top of your Maryland state taxes in 2024, begin by understanding your tax filing status and accurately calculating your taxable income. Deduct allowable expenses to lower your tax bill and calculate your Maryland state tax based on your income and deductions.

Estimate whether you’ll receive a refund or need to make a payment, then file your tax return on time. If you owe taxes, be sure to pay your liability promptly. Don’t forget to explore Maryland’s tax credits, address any audits or appeals if needed, and stay informed about any tax law changes that could impact your return.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.

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