The Best and Worst States for Taxes

As if paying federal taxes is not bad enough, you also have to take care of those imposed by your state. If you don’t know anything about state taxes you may find yourself struggling to stay on top of things. Just as you owe money to the IRS every year, based on your income, your state expects the same. Along with this, you probably have to pay taxes to your municipality as well.

Of course, some state taxes are better than others. This means that some states tax at a lower rate which often time attracts people from other areas of the country. The IRS tax system is the same for everybody in the United States. States have the right to impose their own system.

Before we go any further, you should know that some states do not have any income tax. They include: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

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If you are not living in a state with no income tax you should know what you are being charged. States with a flat rate individual income tax include: Colorado (4.63 percent), Illinois (3 percent), Indiana (3.4 percent), Massachusetts (5.3 percent), Michigan (4.35 percent), Pennsylvania (3.07 percent) and Utah (5 percent). These state taxes are among the lowest in the country.

At this time, Hawaii and Oregon are the two worst places to live when it comes to state taxes. They both impose a state tax rate of 11 percent. 

These are some of the best and worst states for taxes. If you are trying to avoid income tax, you should live in one of the nine states do not have this tax. Regardless of where you live, you should always keep in mind that you have to pay state taxes in addition to federal and local taxes.