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- Federal income tax is collected by the IRS under one nationwide tax code, while state income tax is collected by each state under its own rules, tax rates and deductions.
- For 2026, the federal standard deduction is $16,100 for single filers, $32,200 for joint filers and $24,150 for heads of household, and nine states, including New Hampshire, have no income tax.
- Most people file Form 1040 plus a state tax return, and multi-state income, a move, or SALT limits (a $40,400 cap in 2026, with a phase-down at higher incomes) can change what you owe.
- Single-state filers can often file themselves, but if you have multi-state income, a pass-through business or a CPA practice with seasonal overload, compare federal tax compliance services on scope, review process and security.
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Book a Free ConsultationThe IRS collects federal income tax under one nationwide tax code, and the tax rates stay the same wherever you live. In contrast, each state collects state income tax under its own rules, rates and deductions, and some states don’t tax income at all. As a result, most people pay both and file a federal and a state return.
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