Madison Personal Tax Preparation

Personal Returns Around DSU and the Lakes

A Madison return might belong to a DSU professor with grant and consulting income, a graduate assistant, a software engineer working remotely for a company in another state, a welder at the Manitou plant, a retired couple with a cabin on Lake Herman or a farm family. South Dakota has no income tax, so the federal return is the main filing. BOMCAS prepares personal returns for Madison households remotely.

For residency and federal basics, read our South Dakota personal tax page; below are the DSU, remote-work and lake-property questions common in Madison.

DSU Faculty and Staff

University employees take part in the South Dakota Retirement System, and many contribute to voluntary savings plans that reduce taxable wages. Faculty with summer salary, research grants paid through payroll, consulting or speaking fees report each in the right place, with consulting expenses on Schedule C.

Graduate Students

Graduate assistants receive taxable stipends and may receive tuition waivers that are generally tax-free unless they are payment for services. Students in DSU's master's and doctoral programmes who work full time and study online can often claim the lifetime learning credit for tuition they pay themselves, or exclude employer education assistance up to $5,250 a year.

Remote Technology Workers

Madison residents working remotely for employers in other states generally owe no state income tax on that work, but employers sometimes withhold their own state's tax. A few states tax remote employees of in-state employers under convenience rules. We file nonresident returns where needed to recover tax withheld in error. Stock options and restricted stock from technology employers need careful reporting, because the W-2 and the brokerage statement often show different cost basis.

Manufacturing Workers

Plant workers with overtime may benefit from the federal deduction for qualified overtime premium pay for 2025 through 2028, based on what the employer reports.

Lake Property Owners

Owners who rent out a cabin on Lake Madison or Lake Herman for fewer than 15 days a year can usually exclude the rent from federal income, though sales tax may still apply. Renting more days makes the rent taxable, with expenses split between rental and personal use. Selling a lake home that was a second home produces a capital gain without the main home exclusion.

Farm Families

Farm families report crop and livestock income on Schedule F and may use income averaging in a strong year. Cash rent from farmland is usually rental income reported on Form 4835 or Schedule E.

Retirees

Retirees benefit from South Dakota's lack of income tax on pensions and Social Security. Federal tax still applies, and required minimum distributions, qualified charitable distributions and Roth conversions can be planned.

What to Bring

W-2s, 1099s and Form 1098-T.
Stock compensation statements.
Rental days and income for lake property.
Farm records.
Last year's return.

Education Savings

Parents saving for college can use any state's 529 plan, since South Dakota offers no deduction. Up to $35,000 of unused 529 savings can later move to a Roth IRA for the beneficiary under certain conditions.

Withholding Check

Households with two incomes, overtime or freelance work should review W-4s each year. A small adjustment can prevent a balance due or a large refund that ties up money all year.

Health Savings Accounts

Households with high-deductible health plans can contribute to an HSA, reducing taxable income, and use it tax-free for medical costs. We report HSA activity on Form 8889.

Parents with children in Madison schools who pay for day care or summer day camps can usually count those costs toward the child and dependent care credit, keeping provider names and tax numbers.