Seven states have a flat income tax, and of those seven Massachusetts has the highest state income tax rate. While the tax rate is set explicitly by the Massachusetts legislature, the Massachusetts personal exemption is indexed to inflation and changes every year. Money withdrawn from most private pensions and retirement accounts, including 401(k)s and traditional IRAs, is considered taxable income.
Compare Neighboring States
Massachusetts has some of the highest cigarette taxes in the nation. Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, median property taxes paid exceed $6,000 per year. The median property tax bill in the state is $5,584 – one of the highest in the country. Clothing purchases, including shoes, jackets and even costumes, are exempt up to $175. A product that costs more than $175 is taxable above that amount, so a $200 pair of shoes would be taxed at 6.25% on the $25 above the exemption limit.
These offers do not represent all available deposit, investment, loan or credit products. Meanwhile, the state inheritance tax only applies to the estates of people who died on or before Dec. 31, 1975. The credit is worth the cost of the removal or fix, up to $1,500. As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers.
Massachusetts has a graduated state individual income tax, with rates ranging from 5.00 percent to 9.00 percent. Massachusetts also has a 6.25 percent state sales tax rate and does not have local sales taxes. Massachusetts has a 1.04 percent effective property tax rate on owner-occupied housing value. Massachusetts tax rates place this state 34th in the rank list published by taxfoundation.org.
The state’s income tax rate is only one of a handful of states that levy a flat rate. Massachusetts also has a flat statewide sales tax rate of 6.25%. That simplicity makes filing your Massachusetts state income tax return easier than in states with tiered tax brackets, where different income levels are taxed at varying rates. However, in the state of Massachusetts, not all income is equal. Certain short-term capital gains are taxed at a rate of 8.5% and long-term capital gains from the sale of collectibles are taxed at a rate of 12%. Additionally, Massachusetts levies both an estate tax and a real estate transfer tax.
Capital Gains Tax Calculator
Single filers making more than $325,000 (or $650,000 married filing jointly) can expect to reach the highest tax rate of 11%. However, that income rate drops to 1.4% for single taxpayers making less than $9,600 (or $19,200 for married couples). New Jersey’s top income tax rate is the fourth highest in the nation.
- Gasoline taxes in Massachusetts add up to 27.4 cents per gallon.
- Many policies, such as minimum wage levels, tax brackets, and means-tested public benefit income thresholds, are denominated in nominal dollars, even though a dollar in one region may go much further than a dollar in another.
- So if you want to leave something substantial for your heirs, you might not want to live and retire in Hawaii.
- This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).
Are pensions or retirement income taxed in Massachusetts?
The top tax rate in The Gopher State is 9.85% for single filers making more than $198,630 ($330,410 for married filing joint couples). This is good to remember as we list the states with high-income tax rates, since only part — not all — of your income could be taxed at the highest rate. Property tax rates are based on home values and vary by location. The average property tax rate in Massachusetts is 1.04 percent, according to the Tax Foundation.Learn more about property tax in Massachusetts. People who are blind, seniors, surviving spouses and veterans, as well as anyone who claims the Bay State as their primary residence, may qualify for local property tax exemptions. Personal property such as cars and boats are typically taxed locally through excise taxes.
Income-Producing Properties Expense Reports
Retirement taxes may be expensive on the Jersey Shore, especially for high-income earners. All new employees must complete both federal Form W-4 and s Massachusetts Form M-4, Massachusetts massachusetts tax rates and rankings massachusetts taxes Employee’s Withholding Exemption Certificate, for tax withholding purposes. Gasoline taxes in Massachusetts add up to 27.4 cents per gallon. A financial advisor can help you understand how taxes fit into your overall financial goals.
4 – Massachusetts Itemized Deductions
This is the last day people have to file their returns in a timely manner and pay any taxes due. The Income tax rates and personal allowances in Massachusetts are updated annually with new tax tables published for Resident and Non-resident taxpayers. The Tax tables below include the tax rates, thresholds and allowances included in the Massachusetts Tax Calculator 2024. The City of Worcester issues real estate tax bills quarterly. The “preliminary” tax is calculated on the basis of the previous year’s taxes divided by four.
Policymakers should consider the unintended consequences, both to public health and public coffers, of the excise taxes and regulatory regimes for cigarettes and other nicotine products. By clicking SUBMIT, I agree a Coldwell Banker Agent may contact me by phone or text message including by automated means about real estate services,and that I can access real estate services without providing my phone number. I acknowledge that I have read and agree to the Terms of Use and Privacy Policy. Each year, the City Assessor determines the full and fair cash valuation of all real property and personal property estates for the purpose of taxation.
Mass. collects more taxes than expected to start 2025, driven by capital gains, millionaires’ tax
- As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers.
- We believe everyone should be able to make financial decisions with confidence.
- Market value, also known as “full and fair cash value,” is the desired result of a reassessment.
- This information being provided is for consumer’s personal, non-commercial use and may not be used for any other purpose other than to identify prospective properties consumers may be interested in purchasing.
- That rate applies equally to all taxable income up to $1 million.
The assessor is required to assess all property at its full and fair cash value. The collection and analysis of rental data of income-producing properties is essential in the development of a fair and equitable valuation of your property and comparable properties. These exceptions are called “statutory exemptions.” Qualifying citizens must own their property in whole or in part and must apply annually. Because of the “low” income thresholds for the top tax rate, you might rethink potential retirement in Oregon. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).
SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. We believe everyone should be able to make financial decisions with confidence. This information being provided is for consumer’s personal, non-commercial use and may not be used for any other purpose other than to identify prospective properties consumers may be interested in purchasing.
This $8,000 income threshold is per person, giving married couples the option to file jointly or separately. Massachusetts is one of a small group of states with a flat income tax rate. This differs from many other states’ approaches to personal income tax, which typically tax different portions of your income at different rates. Massachusetts keeps things straightforward for its taxpayers with a flat state income tax rate of 5% for most earners. This flat rate means you owe the same percentage regardless of your income.
To have qualified for a six-month extension, you must have paid at least 80% of the total amount of tax owed by that mid-April deadline. If you didn’t owe any taxes and didn’t file by the deadline, an extension to October was automatically granted. Anyone who files a Massachusetts state tax return is given a personal exemption amount based on their tax-filing status. Taxpayers may also be eligible for additional exemptions, such as those for having qualifying dependents or for having paid certain types of medical or dental costs throughout the tax year. There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state. Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $1 million.
Both companies produce multiple editions for simple to very complex tax returns, so be sure to carefully compare the features offered by each package. Notably, Massachusetts has the highest maximum marginal tax bracket in the United States. You can learn more about how the Massachusetts income tax compares to other states’ income taxes by visiting our map of income taxes by state. If you miss this deadline, you may be able to get a six-month extension if you pay at least 80% of the total amount of tax owed by the April due date. If you don’t owe any taxes and don’t file by the deadline, an extension to October is automatically granted. In the Bay State, estates are taxed at rates ranging from 0.8 percent to 16 percent, depending on the value of the estate.
For details on specific deductions available in Massachusetts, see the list of Massachusetts income tax deductions. Massachusetts collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets. Unlike the Federal Income Tax, Massachusetts’ state income tax does not provide couples filing jointly with expanded income tax brackets. The deadline to file a Massachusetts state income tax return is April 15, 2025.
Failure to respond to an information request within thirty (30) days of the date of the request, will result in a denial of the application and may bar an appeal to the Appellate Tax Board. Choose at least one of the projects below to calculate your tax increase.The tax rate impact values below are estimates only. Values may vary based on when debt for any given project is added to the tax base. The Department of Revenue said Thursday the $4.193 billion collected last month was $127 million or 3.1% more than total collections in March 2024 and put the state’s year-to-date tax take for fiscal 2025 at $29.681 billion.