TUCSON, Ariz. (KGUN) — Due to a new law that just took affect January 1, Arizona’s tax brackets are combining, and that could mean some good news for Arizonans.
Mikala Jansen, a CPA with Jansen and Company said this year’s new flat income tax is lower than the lowest tax rate was in 2022.
As for the amount people will owe in taxes, she said that depends on their income and filing status.
“For a lot of years there, we had 4 tax brackets and for 2022, there’s actually 2 tax brackets. Those are the tax returns we’re getting ready to file,” Jansen said.
Jansen said because there were less tax brackets last year, she expects people to be paying less in taxes this tax season.
“The withholding rates did not change in 2022, but the tax rates did, so it is highly likely that people will receive slightly larger than usual refunds on their 2022 returns,” she said.
She recommends people evaluate their Arizona withholding rate.
“In most cases, you can have fewer dollars taken out of your paycheck and then reconcile it when you do your tax return at the end of the year,” she said.
She said you’ll be getting those savings throughout the year instead of through your tax return.
She also added that because Arizona has a new withholding form, it’s important to fill it out.
“If you choose not to update that form, the software will generally default to a 2 percent withholding rate, but here’s the trick, Arizona’s tax rate is 2 and a half percent,” Jansen said.
Jansen said that means you could end up owing money for the 2024 tax season and because of the new law, people can save up to a thousand dollars depending on their income and filing status.
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