Want to Pay Lower Taxes? Here's Where You Should Move
If you want to keep a bigger portion of your paycheck next year, pick up and head west. According to a new report from WalletHub, the states with the lowest tax burdens on the middle class include Alaska, Montana, and Wyoming. The states with the heaviest tax burdens on the middle class: New York, Illinois, Arkansas, Hawaii, and Maryland.
In fact, you'll pay the fewest taxes in Alaska whether you're rich, poor, or somewhere in the middle. Altogether, low earners pay an average of 5.4% of their income in total taxes (including sales taxes, property taxes, and income taxes), middle earners pay an average of 4.5%, and high earners pay an average of just 3.4%.
Compare that to New York state, where households earning $50,000 pay an average of 12.4% of income in taxes. WalletHub found that New York state was the worst state for middle and high earners and the eighth worst for low earners.
Here are the full rankings.
The five states where middle earners (households making $50,000) pay the least:
- Alaska
- Delaware
- Nevada
- Montana
- Wyoming
The five states where middle earners (households making $50,000) pay the most:
- New York
- Illinois
- Arkansas
- Hawaii
- Maryland
The five states where high earners (households making $150,000) pay the least:
- Alaska
- Wyoming
- Nevada
- Tennessee
- South Dakota
The five states where high earners (households making $150,000) pay the most:
- New York
- Connecticut
- Maryland
- New Jersey
- Minnesota
The five states where low-income earners (households making $25,000) pay the least:
- Alaska
- Delaware
- Montana
- Nevada
- South Carolina
The five states where low-income earners (households making $25,000) pay the most:
- Washington
- Hawaii
- Illinois
- Arizona
- Ohio
Read the full WalletHub report here.
For answers to your tax questions, check out Money's 2015 Tax Guide:
11 Smart Ways to Use Your Tax Refund
Don't Make These 8 Classic Tax Filing Fails
Why the IRS Probably Won't Audit Your Return This Year