All articles tagged with #state taxes
Oregon is set to receive between $61 million and $131 million in state taxes from the individual who purchased the winning $1.3 billion Powerball ticket in Northeast Portland, depending on whether the winner chooses an instant payout or installments over 30 years.
The Mega Millions jackpot has reached nearly $1 billion, but the amount you take home could vary significantly based on state taxes, with eight states not taxing lottery winnings at all. Federal taxes on winnings are 24% upfront, but could reach 37% after filing. Where you buy the ticket also matters, as out-of-state purchases could trigger additional taxes. Winners should consider consulting a tax professional to navigate the implications and make informed decisions.
Working from different states while living in another can lead to potential double taxation, as each state has different rules regarding income tax for residents and nonresidents. States without income tax and those with reciprocal tax agreements can simplify the tax process, but the "convenience of the employer rule" in certain states may still result in double taxation. Additionally, spending time in multiple states can further complicate taxes, requiring individuals to track the amount of time spent in each state.
As tax season approaches, Social Security recipients should be aware that around a dozen states will tax their benefits for the 2023 tax year, with different rules for each state based on age and income. Some states, like Missouri and Nebraska, will stop taxing residents on Social Security in 2024. To reduce taxes on Social Security benefits, experts recommend investing in a Roth IRA, where taxes are paid on money going into the account, making all future withdrawals tax-free.
Retirees in certain states may face lower Social Security payouts in 2024 due to state taxes on benefits. Ten states, including Colorado, Connecticut, and Vermont, tax a portion of Social Security benefits. Each state sets its own rules regarding who gets taxed and how much. Additionally, federal tax rules apply to Social Security benefits regardless of state taxes. The IRS uses "combined income" to determine federal tax owed, which includes adjusted gross income, half of the annual Social Security benefit, and nontaxable interest. Having a Roth IRA can help lower federal tax bills by providing tax-free withdrawals in retirement.
Jeff Bezos' decision to move from Seattle to Miami has sparked debates about state taxes, despite him not mentioning them in his announcement. Washington recently upheld a 7% tax on capital gains above $250,000, while Florida has no capital gains tax. Washington also has an estate tax, while Florida does not. Critics argue that Bezos' move could help him avoid paying billions in taxes. There is ongoing uncertainty about Bezos' residency and efforts to pass a "billionaire tax" in Washington. By moving to Florida, Bezos may be avoiding potential wealth taxes and reducing revenue projections. It is common for billionaires to move to low-tax states.
While federal student loan forgiveness under the American Rescue Plan Act (ARPA) is exempt from federal taxes, some states, including Indiana, Mississippi, North Carolina, and Wisconsin, plan to tax the amount of federal student loan forgiveness. Arkansas is still deciding whether to impose taxes on debt cancellation. Borrowers in these states should prepare for potential taxes and consult with a tax advisor. The forgiven amount will be counted as income, and the tax owed will depend on the individual's tax bracket. Certain loan forgiveness programs, such as Public Service Loan Forgiveness and Borrower Defense to Repayment Discharge, may be exempt from state taxes. ARPA's exemption from federal taxes on student loan cancellation expires at the end of 2025, potentially leading to the resumption of federal and state taxes on loan forgiveness unless exemptions are extended or tax laws change.
A report by personal finance website WalletHub has analyzed the total tax burden by state, measuring the proportion of property tax, income tax and sales tax that people paid. The states with the highest tax burdens were New York, Hawaii, Maine, Vermont, Connecticut, New Jersey, Maryland, Minnesota, Illinois and Iowa. The states with the lowest tax burdens were Alaska, Delaware, New Hampshire, Tennessee, Florida, Wyoming, South Dakota, Montana, Missouri and Oklahoma. The report also broke down the tax burden by category, with Maine, Vermont and New Hampshire having the highest burden for property tax, and New York, Maryland and Oregon having the highest burden for income tax.
New York has the highest overall tax burden of all 50 states, according to a new study by WalletHub. The study compared property taxes, individual income taxes, and sales and excise taxes to calculate the proportion of total personal income that residents pay toward state and local taxes. The 10 highest tax states lost nearly 1 in 100 residents in net domestic migration between July 2021 and July 2022, while the 10 lowest tax states gained almost 1 in 100, according to a recent analysis. Some experts argue that higher taxes inhibit economic growth, while others say that certain kinds of public investments can increase economic growth.
A new report from WalletHub shows that taxpayers in some states carry a far heavier burden than others, with residents of states with the highest taxes forking over double their share of annual income as those in the lowest taxed ones. Researchers calculated residents' tax burden by adding up three types of tax types: property taxes, individual income taxes, and sales and excise taxes. Alaska has the lowest overall tax burden at 5.06%, while New York has the highest at 12.47%.