The Best States for Taxes
The state in which you live makes a big difference when it comes to how much you will pay in state taxes. Although every state shares similar strategies in how they generate revenue through taxes, each one is unique in its own way. If you are lucky, you live in a state that is not hard on residents in terms of state taxes.
Wyoming is one of the best states for taxes. If you live in this state, you will pay approximately $7 in state taxes on every $100 earned. While this may sound like a lot, compare it to New Jersey. Those living in the Garden State pay $12 for every $100.
Generally speaking, you can expect to pay just about 10 percent of your income to state and local governments. And of course, this does not take into account the money that must be paid in federal income taxes.
Other states (in addition to Wyoming) that are considered best for taxes include: South Dakota, Alaska, Florida, Nevada, Montana, Delaware, New Hampshire, Utah, and Washington. For different reasons, each one of these states is beneficial from a state tax standpoint.
In South Dakota, for example, there is no individual income tax or corporate tax. Along with this, they have a low state sales tax of only four percent.
Florida is also at the top of the list. In addition to sales tax of six percent, the state does not impose any individual income tax. On top of this, they have a corporate tax rate of 5.5 percent. With these tax breaks, as well as many others, many retirees flock to the state of Florida.
What about Alaska? This state is often times overlooked due to an “out of the way location” and small population. That being said, its state taxes are among the best. Most importantly, there is no sales tax or individual income tax in this state.
The states without a personal income tax are always considered among the best by many people. They include: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
States without any sales tax include: Oregon, New Hampshire, Montana, Delaware, and Alaska.
Overall, some states tax residents at a much lower rate than others. If you live in one of the best states for taxes, you should be glad that you are not paying nearly as much in state taxes as those in many other parts of the country.