Yahoo Finance Texas doesn’t have an income tax. How much money is being taken out of your paycheck?
Texas doesn’t have a state income tax, so what tax money is coming out of our paychecks?
GoBankingRates recently conducted a study that determined how much money (for taxes) gets taken out of bi-weekly paychecks in each state, both single and joint filings. Only eight states don’t tax income, and for these, the study accounts for other state-obligated and federal income taxes.
Texas ranks as the sixth cheapest state for single tax filers and 13th for joint filers. According to the study, single filers in Texas lose about $336 every paycheck due to taxes. For joint filers, approximately $410. When you do see taxes taken out of your paycheck in Texas it’s most likely federal income tax, medicare and social security.
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Overall, Florida is the cheapest state for singles and Louisiana for married couples. Avoid living in Massachusetts if you’re single or Hawaii if you’re married, as they are the priciest taxed states.
Each state has a different cost of living and services that determines the cost and types of taxes. As far as all 50 states go, here are the lists of cheapest to priciest states for single and joint filings according to GoBankingRates:
Single filing
Florida: $306
Tennessee: $306
Nevada: $307
South Dakota: $310
Mississippi: $332
Texas: $336
Wyoming: $337
Louisiana: $356
Oklahoma: $354
Arkansas: $353
New Mexico: $358
North Dakota: $359
Ohio: $374
Arizona: $373
Missouri: $376
Kentucky: $379
Idaho: $380
North Carolina: $384
Alabama: $383
Indiana: $393
Montana: $393
Wyoming: $393
South Carolina: $399
Alaska: $405
Kentucky: $405
Kansas: $409
Texas: $410
Nebraska: $413
Alabama: $412
Wisconsin: $421
Iowa: $443
Vermont: $446
Georgia: $433
New Hampshire: $433
Pennsylvania: $433
Michigan: $439
Maine: $436
Virginia: $540
Oregon: $542
New York: $559
New Jersey: $586
Alaska: $405
California: $509
Hawaii: $509
Minnesota: $513
Colorado: $513
Illinois: $493
Rhode Island: $490
Delaware: $464
Connecticut: $624
Maryland: $611
Massachusetts: $681
Joint filing
Louisiana: $351
Tennessee: $357
New Mexico: $365
West Virginia: $368
Mississippi: $335
South Dakota: $391
Florida: $387
Oklahoma: $393
Wyoming: $393
Arkansas: $372
Arkansas: $372
Nevada: $410
Texas: $410
Alabama: $412
Nebraska: $490
Kansas: $501
Idaho: $516
Iowa: $531
Vermont: $531
Georgia: $555
New York: $620
Washington: $626
Rhode Island: $608
Illinois: $606
Delaware: $675
Oregon: $674
Virginia: $709
Connecticut: $763
Utah: $765
Colorado: $708
Maryland: $831
Massachusetts: $844
Hawaii: $890
Texas tax laws
Each state has the power to determine its own taxation laws, thanks to the Sixteenth Amendment of the U.S. Constitution. In Texas, there is no state income tax, meaning residents do not have to levy a state income tax return every year or have any chunk of change pulled from their paychecks.
Instead, Texas has sales and property tax. The standard sales tax rate in Texas is 6.25%, “However, local tax jurisdictions have the authority to impose up to an additional 2% tax. Consequently, in certain regions of Texas, the cumulative sales tax can reach up to 8.25%,” according to Melton and Melton LLP.
Property taxes in Texas are dependent on which county you live in and the property you live in. These taxes are funding for schools, construction, and government resources which is why they are on the higher end. However, there are many exemptions that you can get on your property tax worth looking into.
Typically, joint filing leads to more savings. “Filing together usually means you can earn more and still qualify for certain tax breaks, like IRA contributions and education credits,” according to TurboTax. Joint filers also received a hefty standard deduction on their tax return each year.
