QoD: How many states do not have state income taxes?
Did you know that most people have to file tax returns for BOTH federal AND state income taxes? Listed below are 7 states that do not (as of 1/10/2020) have state income taxes.
Answer: 7: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming
Find the top tax rate for your state here:
Note: Tennessee and New Hampshire tax investment income.
- How does your state's tax rate compare to other neighboring states?
- Do you think that states that have high state income tax rates (e.g., CA and NY) have to pay higher salaries to compensate employees for these high taxes?
- Can you name common taxes that people pay other than state and federal income taxes?
Behind the numbers: (Business Insider)
But living in a state with no income tax doesn't necessarily mean you're getting off scot-free. Texas and New Hampshire, for instance, may not tax your earnings, but they do have some of the highest property tax rates in the country, which could ding you if you're a property owner.
Likewise, Tennessee doesn't tax your paycheck, but it will get you in the checkout line. The state has one of the highest sales tax rates in the country at 7%.
Good news for those wondering about updated tax resources. NGPF recently updated the Taxes Unit!
About the Authors
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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