We want to make sure you get every dollar you’re entitled to. Our 2018 State Tax Calculator should help you prepare for next year.
It should not be used for any other purpose, such as preparing a federal income tax return or to estimate anything other than your own personal tax liability.
This tax calculator is provided on an as-is and as-available basis. We make no warranty for any use of the calculator, including its accuracy or completeness.
Select your state from the list below to calculate the State tax due based on your Annual Gross Income (AGI) for 2019/2018. The Tax State Calculator is maintained and run by Our Tax Calculator as a stand alone calculator for Income Tax calculation in the United States. Please address any suggestions/change recommendations/feature requests by Our Tax Calculator, our parent website. Your feedback helps to refine the tax calculator if there is a specific element which you feel should be tax deductible or taken into consideration when calculating income tax please let us know.
Click on the state name to access a bespoke State and Federal Tax Calculator or click on a salary amount to see a Federal and State tax illustration for that State, handy if you are looking to move between states and compare the relative tax costs for each state.
Now this system of marginal tax brackets is obviously more complex than using a flat tax, where all income is taxed at the same rate, no matter how much you make. So the obvious question is “why”? Why would we choose to use a more complicated system when a simpler one is available?
The answer to this question is that Americans have decided that it is important to have a progressive tax system in the US. The main benefit of the marginal tax rate system is that it shifts some of the burdens of paying the taxes from those who are less able to do so to those who are more able to do so. It is pretty simple to understand that those who make little income do not have a lot of disposable income. The value of every dollar of income to a low-income earner is high, as this money is needed to pay for the necessities of life. As income grows, it becomes easier to pay for the necessities of life, and the value of each dollar shrinks relatively. Since those who earn higher incomes are better able to pay more taxes without sacrificing the necessities of life, it makes sense that those who earn more pay more.
The next important concept to understand is the various definitions of income. In terms of income in regards to tax, the government looks upon the sources of income differently. Basically, there is earned income, dividend income, and taxable gain income. Taxable gain refers to the gain or loss one receives when an asset is purchased and then sold. If some shares in a company are purchased for $10,000, and then sold later for $20,000, then a $10,000 capital gain has occurred. The government has treated capital gains differently over time.
Dividends are the profits that are paid to the owners of a company by the company. Corporations in America are obliged to pay tax on the profits they receive each year. These after-tax profits can then be paid to shareholders of the company as dividends. Since these profits have already been taxed, taxing these dividends fully again would be a form of double taxation. Governments want to encourage people to invest in companies, as this helps grow the economy, and so they provide a preferential tax treatment for dividend income.
If you work and receive pay, then you make earned income. This income is simply taxed at 100% of its value. No adjustments are made to the value of earned income before tax rates are applied.
Another important concept to understand is the income tax deduction. Governments want to encourage some behavior that may benefit the country, such as attending post-secondary education. In order to encourage this type of behavior, the government will allow some expenses to be deducted from the total amount of income before tax rates are applied. Deductions are powerful tax tools since they reduce the total amount of taxes owed. Because of the marginal tax rate system we have in the US, deductions reduce income from the highest tax bracket first, saving the most tax possible. This is very important to those who are able to use deductible expenses to save taxes.
401k contributions are tax-deductible, within the limits set each year. This provides Americans with a powerful incentive to save using a 401k. The US Tax Calculator above will help you understand how making a 401k contribution will benefit your tax payment.
In addition to allowing deductions, governments will also allow tax credits to be used to reduce the actual amount of income tax payable. Again, this is to encourage certain behavior. The tax credit is applied to the actual taxes owing and can reduce your total tax bill.
As you can see, there is a lot to understand in the American tax code. The US Tax Calculator above will help you to understand the basic tax information you need to make plans, but it is always advisable to find a qualified tax professional for detailed proper financial planning.