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This is how much income tax you’re paying to your state News 

This is how much income tax you’re paying to your state

This is how much income tax you’re paying to your state

New Yorkers are paying the heftiest state income taxes.

Residents in the state paid $2,249 per capita in individual state income taxes during the 2017 fiscal year, according to data from the Tax Foundation.

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Connecticut came in second with $2,218. Massachusetts followed in third: $2,146.

Meanwhile, there are seven states that don’t tax individual income: Alaska, Florida, Nevada, South Dakota, Texas, Washington state and Wyoming.

Though Tennessee and New Hampshire don’t tax wages, they do levy income from interest and dividends.

Here’s where your state ranks, according to the Tax Foundation.

Tax havens

Income taxes make a significant contribution to states’ coffers. Nearly 40% of state tax collections come from levies on your wages, according to the foundation.

If you’re thinking of fleeing to a place with a lower or no income tax, remember that states need to get their revenue from somewhere.

“There are other taxes that matter, including sales and property taxes,” said Katherine Loughead, policy analyst at the foundation.

See below for a breakdown of property tax by state and per capita from the Tax Foundation.

“The state estate tax can factor in for a lot of people as to whether they’ll be taxed at high rates if they pass their estate along to their heirs,” Loughead said.

Here’s an example: New Hampshire won’t levy your wages, yet the Granite State imposes some of the highest state and local property taxes per capita — $3,115, the Tax Foundation found.

Further, some localities have their own income levies. This means that while the state you move to matters, so does the city or town in which you work or reside.

“Local taxes can really depend on whether you live in an urban environment versus rural,” said Loughead.

Reduced deductibility

CNBC: IRS Internal Revenue Service taxes caution light Washington D.C. 180328-001
The Internal Revenue Services offices in Washington, D.C.

Under the Tax Cuts and Jobs Act, residents who pay steep state and local income and property taxes will only be able to deduct $10,000 of the sum.

Meanwhile, the average SALT deduction claimed by a New Yorker in 2016 was $21,779, according to the Tax Policy Center

New Jersey residents deducted an average of $18,092, while Connecticut taxpayers deducted $19,563.

The three states put in place legislation that would allow municipalities to set up charitable funds that residents can contribute to get around the $10,000 SALT cap.

The IRS in June released rules that would discourage this practice.

New Jersey, New York and Connecticut pushed back against those regulations by filing suit against the federal agency and Treasury Department secretary Steven Mnuchin on Wednesday.

 

Source:- cnbc

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