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How to File Your Virginia Income Tax Return

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Update: Virginia has discontinued iFile and have instead joined the Federal/State E-file program along with 37 other states.  Federal/State E-file offers free e-filing of both federal and state returns.

Forget filling out forms by hand and standing in line at the post office.  In Virginia, you can fill out and file your tax return online, something many states are beginning to implement.  In order to use this service, you must have already filed a Virginia tax return for any year between 2002 and 2009.

What You’ll Need to Get Started

  • Social Security number
  • Your most recent Virginia tax return
  • Your completed federal tax return for the current year
  • All of your tax statements and information for the current year (Forms W-2, 1099, etc.)

Step 1:  Create an Account.  Go to the Virginia Department of Taxation website at www.tax.virginia.gov and click on “Virginia iFile.”  When the new page loads, on the right side of the screen you will see a box for new users, click on “Enroll” inside this box.  This will take you to a new screen where you can set up an account and create a password.  Once this is done, begin your return by entering your name, address, and filing status (single, married filing jointly, etc.).  Make sure your filing status matches your federal return and click “Next.”

Step 2:  Enter payments.  At the top of this page, you will enter your estimated tax payments.  These are any additional payments that you made during the year (this is not your paycheck withholdings from your W-2).  Don’t forget to include any overpayment amount from last year’s return that you chose to apply to the current year’s estimated tax (you can find this on last year’s Virginia return on line 27).  At the bottom of the screen, you will enter the information from your Form W-2 or Form 1099.  Enter this information only if your form includes Virginia withholding since this page is only for payments.  Your will enter your income later.  Click “Next.”

Step 3:  Income and Adjustments.  Virginia’s state income tax return, like most states, begins with your federal adjusted gross income.  You then make certain additions and subtractions to that number to arrive at your Virginia taxable income.  Therefore, the first thing you will enter on this page is your federal adjusted gross income (AGI).  If you filed a federal Form 1040 you will find this on line 37 of your federal Return.  The next items you will enter on this page are your additions and subtractions. 

Additions are items that are deductible for federal purposes, but are not deductible in Virginia.  This could also be income that is exempt from federal tax but is taxable in Virginia.  If you received interest income on municipal bonds from states other than Virginia or interest income from U.S. Treasury bonds, enter the amount as an addition.  You will add these amounts back since they were not included in your Federal AGI, but need to be included in your Virginia taxable income. 

You will see Fixed Date Conformity additions and subtractions listed on this page as well.  These adjustments will not affect the average person.  They are for business owners whose federal return includes bonus depreciation or net operating loss (NOL) carry backs. 

Subtractions are items that are exempt from Virginia income tax, but had to be claimed as income on your federal return.  Subtractions include your state income tax refund, Social Security benefits, unemployment compensation, military pay, and Virginia lottery winnings, among others.  A full list of subtractions will be listed at the bottom of the screen.  

Once you have entered your federal AGI and any additions and subtractions, click “Next.” 

Step 4:  Deductions and Exemptions.  If you claimed the standard deduction on your federal return, you have to use Virginia’s standard deduction as well.  Select “Standard” if this applies to you.  If you itemized deductions on your federal return, you will need to select “Itemized” on this page and enter the total amount of your federal itemized deductions.  In the box below your itemized deduction total, you will enter the amount of state taxes that you deducted on your federal return.  You can find this on line 5a of your federal Schedule A.  You will then be asked if you need to enter any other deductions.

Virginia allows deductions in addition to those allowed on your federal return.  A full list of these other deductions will appear at the bottom of the screen.  The most common of these deductions are child and dependent care expenses, continuing teacher education, sales taxes on energy efficient appliances, and the foster care deduction.  If you incurred any of these deductible expenses during the year, select “Yes.”  You will enter the amounts of these deductions on a separate screen. 

On this same screen, you will also be asked if you would like to use the Spouse Tax Adjustment (STA) Worksheet.  Answer “Yes” to this question if you and your spouse both have income.  This worksheet calculates you and your spouse’s tax separately.  This way you can both take advantage of the lower tax rates on the first $17,000 of each of your incomes.  Doing this could save you up to $259 in tax.  Once you’ve answered this question, click “Next” at the bottom of the page.  You will enter you and your spouse’s income items separately on a new screen after you enter your other deductions.

Step 5:  Preview and File.  The last screen lets you review all of the information you have entered and correct any mistakes, you can then choose payment options or choose between direct deposit or a paper refund check.  When you click “File Return” at the bottom of the page, you are officially submitting your return.  A confirmation page will come up showing everything you entered.  This is your copy of your tax return.  Print this page for your records and keep it with your supporting documents for at least three years.  

That’s it.  You don’t need to mail anything in.  You’re done.

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