States With No Income Taxes

Are you tired of paying high income taxes in your state? If so, you may be considering a move to a state with no income tax. While no income tax states can offer significant tax savings, it’s important to carefully consider all the factors before making a move.

In this post, we will cover the top states with no income tax, the benefits of living in a state with no income tax, and how to decide if a no income tax state is right for you. We’ll also provide alternatives to living in a state with no income tax, including states with low income taxes and states with tax credits and deductions.

States With No Income Taxes
States With No Income Taxes

Summary – States With No Income Taxes

StateIncome Tax %Sales Tax %Property Tax %Other Relevant Information
Alaska0%0%1.59%No state income tax or sales tax, but high property taxes and a high cost of living
Wyoming0%4%0.61%No state income tax, but relatively low cost of living and can be prone to extreme weather
South Dakota0%4.5%1.37%No state income tax, but relatively high property taxes and a low cost of living
Florida0%6%1.01%No state income tax, but relatively high sales tax and can be prone to natural disasters such as hurricanes
Nevada0%6.85%0.84%No state income tax, but relatively high sales tax and property values can be high in popular tourist areas such as Las Vegas
Texas0%6.25%2.14%No state income tax, but relatively high sales tax and property values can be high in urban areas such as Austin and Dallas
Washington0%6.5%1.09%No state income tax, but relatively high sales tax and a high cost of living in areas such as Seattle
Colorado4.63%2.9%0.78%Flat income tax rate that is lower than the national average, but relatively low sales tax
Illinois4.95%6.25%2.32%Flat income tax rate that is lower than the national average, but relatively high sales tax
New Hampshire5%0%2.14%No state sales tax, but relatively high income tax and property taxes
Pennsylvania3.07%6%1.59%Flat income tax rate that is lower than the national average, but relatively high sales tax
New Jersey1.4% – 10.75%6.625%2.38%Progressive income tax rate with high top marginal rate, but relatively low sales tax
New York4% – 8.82%4%1.72%Progressive income tax rate with high top marginal rate, but relatively low sales tax
States With No Income Taxes

Note: Sales tax, property tax, and income tax percentages are current as of September 2021 and may change in the future. Other relevant information is based on general trends and may vary by region within the state.

States With No Income Taxes US
States With No Income Taxes US

What are Income Taxes?

Income taxes are a type of tax that people pay on the money they earn. This can include money you make from a job, money you receive from investments, or money you receive as gifts.

In the United States, each state has the ability to set its own income tax rate. This means that the amount of income tax you pay can vary depending on which state you live in. Some states have no income tax at all, while others have income tax rates that are higher or lower than the national average.

In general, you have to pay income tax on any money you earn above a certain amount. This amount is called the “taxable income.” The government sets this amount each year, and it changes depending on your age and whether you are single or married.

To pay your income tax, you will need to fill out a tax return form. This form asks you questions about how much money you earned and any deductions you are eligible for. Deductions are things like charitable donations or expenses related to your job that can lower the amount of tax you owe.

Once you have filled out the form, you will need to calculate how much tax you owe based on your taxable income and the tax rate for your state. You will then need to pay this amount to the government either through automatic payments or by writing a check.

It’s important to pay your income tax on time, because if you don’t pay it, you may have to pay penalties or fines. However, if you have a hard time paying your taxes, you can ask the government for help or make payment arrangements.

In general, paying income tax is an important way for people to contribute to the country and help fund things like schools, hospitals, and roads. Understanding how income tax works and how it can vary from state to state can help you make informed decisions about where you want to live and work.

The benefits of living in a state with no income tax

  • More disposable income: With no income tax, you will have more money in your pocket to spend on other expenses or save for the future.
  • Simplified tax preparation: No need to worry about calculating and paying state income tax, which can make tax preparation easier and less time-consuming.
  • Lower overall tax burden: In some cases, states with no income tax may have lower overall tax burdens due to the lack of income tax. This can make them a more attractive option for those looking to minimize their tax burden.

Cons of no Income Tax States

However, there are also some cons to consider when it comes to living in a state with no income tax:

  • High sales tax: Some states with no income tax may compensate for the lack of income tax by having higher sales taxes. This can make everyday purchases more expensive.
  • High cost of living: Some states with no income tax may have a high cost of living, which can offset the benefits of not paying state income tax. Be sure to research the cost of housing, groceries, and other necessities in the state you’re considering.
  • Limited job opportunities: Some states with no income tax may have limited job opportunities, especially in rural areas. If you’re planning a move for a new job, be sure to research the job market in the state you’re considering.
  • Quality of life: While taxes are an important consideration, they should not be the only factor in your decision. Be sure to research the quality of life in the state you’re considering, including factors such as schools, healthcare, and recreation. Overall, the pros and cons of living in a state with no income tax will depend on your individual circumstances and priorities.
States With No Income Taxes US Map
States With No Income Taxes US Map

Top states with no income tax

Here are the top states with no income tax:

  • Alaska: In addition to no state income tax, Alaska also has no state sales tax. The state does, however, have high property taxes and a high cost of living.
  • Florida: Florida is a popular destination for retirees due to its warm climate and lack of state income tax. The state does have a relatively high sales tax and can be prone to natural disasters such as hurricanes.
  • Nevada: Nevada is known for its casinos and lack of state income tax. The state does have a relatively high sales tax and property values can be high in popular tourist areas such as Las Vegas.
  • South Dakota: South Dakota has a low cost of living and no state income tax. The state does have relatively high property taxes.
  • Texas: Texas is a large state with no state income tax and a relatively low cost of living. The state does have a high sales tax and property values can be high in urban areas such as Austin and Dallas.
  • Washington: Washington is a tech-centric state with no state income tax. The state does have a high sales tax and a high cost of living in areas such as Seattle.
  • Wyoming: Wyoming is a largely rural state with no state income tax. The state does have a relatively low cost of living, but can be prone to extreme weather.

States With No Income Taxes – States With No Income Taxes – States With No Income Taxes

Is a state with no income tax right for you?

While a state with no income tax may seem appealing, it’s important to carefully consider all the factors before making a move. Here are some things to keep in mind:

  • Cost of living: Some states with no income tax may have a high cost of living, which can offset the benefits of not paying state income tax. Be sure to research the cost of housing, groceries, and other necessities in the state you’re considering.
  • Job opportunities: If you’re planning a move for a new job, be sure to research the job market in the state you’re considering. Some states with no income tax may have limited job opportunities.
  • Quality of life: While taxes are an important consideration, they should not be the only factor in your decision. Be sure to research the quality of life in the state you’re considering, including factors such as schools, healthcare, and recreation.

How to compare the tax burden in different states

To compare the tax burden in different states, you can use tools such as the Tax Foundation’s State Business Tax Climate Index or the Federation of Tax Administrators’ State Tax Rates and Brackets. These tools can help you compare the overall tax burden in different states, including income tax, sales tax, property tax, and other taxes.

Alternatives to living in a state with no income tax

If you’re not able to move to a state with no income tax, there are still ways to reduce your tax burden. Here are some alternatives to consider:

  • States with low income taxes: Some states have lower income taxes than others, even if they do not have no income tax. For example, states like Colorado and Illinois have flat income tax rates that are lower than the national average.
  • States with tax credits and deductions: Some states offer tax credits or deductions to residents to help lower their tax burden. For example, some states offer credits for things like education expenses or charitable donations. Be sure to research the tax credits and deductions available in the state you’re considering to see if they can help lower your tax burden.

Read here more info about Income Taxes in the US

States With No Income Taxes – States With No Income Taxes – States With No Income Taxes

Taxable Income Example

Filing StatusTaxable IncomeTax RateTax Owed
SingleUp to $9,95010%Up to $995
Single$9,951 – $40,52512%$995 – $4,863
Single$40,526 – $86,37522%$4,864 – $19,022
Single$86,376 – $164,92524%$19,023 – $39,876
Single$164,926 – $209,42532%$39,877 – $67,179
Single$209,426 – $523,60035%$67,180 – $183,481
SingleOver $523,60037%Over $183,481
Married Filing JointlyUp to $19,90010%Up to $1,990
Married Filing Jointly$19,901 – $81,05012%$1,991 – $9,726
Married Filing Jointly$81,051 – $172,75022%$9,727 – $38,045
Married Filing Jointly$172,751 – $329,85024%$38,046 – $79,752
Married Filing Jointly$329,851 – $418,85032%$79,753 – $134,358
Married Filing Jointly$418,851 – $628,30035%$134,359 – $221,421
Married Filing JointlyOver $628,30037%Over $221,421
States With No Income Taxes

Note: This table represents the federal income tax rates for tax year 2021. State income tax rates may vary and should be taken into consideration when calculating total tax owed.

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States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes – States With No Income Taxes

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