Every individual person, married couple and business owner in America shares one particular thing in common. Whether you live paycheck to paycheck or make a hefty salary, taxes will most likely impact your financial planning or household budget at some point in time.
Your Tax Burden Depends On Where You Live
Depending on where you live, the cost of taxes could be the furthest thing from your mind. While some states ask very little of their citizens, others attempt to squeeze every last cent possible from the hardworking people that live there.
No matter which state you’re in, you’ve likely complained about high prices on heavily taxed food, merchandise or real estate in the area. Before you completely lose your head and become “that guy who lives in the woods to evade the IRS”, you should consider how your state’s tax rates actually compare to others.
Sales, Use, Property And Income Taxes
To determine the best and worst places for taxes overall, rates for property, sales and state income taxes must be examined. Depending on individual circumstance, some types of taxes may weigh more heavily on your finances than others. If you’re among those seriously considering a move based on these policies, you must first understand the benefits and drawbacks of the destination.
If you’re planning on purchasing a home under a mortgage, locations with high property taxes are not ideal. Those with large families and greater food expenses will want to avoid places with high rates for groceries, clothing and regularly used household items. Business owners will benefit from operating within states that don’t impose state level income taxes or those with the lowest rates in the country.
After considering all the different ways local governments fund themselves with their citizen’s wages, it’s easy to determine which states can offer the most financial benefits. It’s also clear that some states could contribute to your new life under a bridge or overpass.
The Best Places To Live For Lower Taxes
- Alaska – If your willing to face the sub-arctic temperatures of the region, Alaska boasts some of the lowest taxes of any U.S. state. With no sales or state income taxes, Alaska is the only state of its kind. Property taxes are considered high in some areas, but many communities remain unincorporated and do not collect property taxes. If you’re addicted to raw fish however, the Office of The State Assessor clearly states that raw fish purchases will require that you pay taxes.
- Wyoming – This state was named as the top tax haven in America by CNBC for numerous reasons. Not only does Wyoming have low fuel and property taxes, but also enforces no state income taxes on individuals or businesses.
- Colorado – With one of the lowest rates for sales taxes in the country, Colorado residents only have to pay 2.9 cents on the dollar and 4.6 percent on state income taxes. Small business owners receive the same relief as individuals because these are flat rates for every citizen of the state. This makes Colorado a great destination for aspiring entrepreneurs and ski bums alike.
- Tennessee – The sales taxes in TN are on the high end at 7% but the state only taxes income that is earned via interest or stock dividends. Businesses within the state are only required to pay taxes at the federal level. This is likely because unlike some states, the sales taxes apply to groceries as well merchandise.
If you’re in one of these states, you don’t have much to complain about. At the opposite end of this however, some places can be a virtual nightmare of sharing large amounts of your hard earned cash with your local state government. If you’re in one of the following states, you’re going to need all the help you can get.
Most Heavily Taxed Places In America
- New Jersey – No other state on the East coast has rates as high as those found in Jersey. With a 8.97 percent rate on individual income and 9.36 percent on businesses, taxes are already higher than the state’s larger neighbor to the North. Combined with taxes of 7 percent on sales, Jersey residents are being robbed on a regular basis.
- New York – With the same rate of taxation on personal income as NJ, the state is well known for its high cost of living. The state’s business and sales taxes are surprisingly lower than New Jersey’s, but both states have extremely high taxes on tobacco and alcohol. If you’re a smoker or a drinker, states that begin with the word “New” are not for you.
- California – Basking in the Western sun isn’t cheap. If you make over $47,000.00 annually in this state, you’ll have to share 9.55 percent of your income with the state. Business owners will not find any relief in the sun either. Taxes at the cooperate level will take 8.84 percent of income from California businesses.
- Iowa – With state income taxes that impose a 8.98 percent rate on individuals, Iowa already seems pretty bad. If you’re business owner, you’ll wonder if they want to keep jobs out of the state entirely. With a 12 percent rate on businesses, Iowa certainly isn’t the place to open a new restaurant chain or anything else for that matter.
These states are among the worst places to live and pay taxes in America. Surprisingly, some local communities within these states increase these rates even further. In New Jersey and other states, it can be difficult for some people to pay their taxes at all.
In communities such as Marlton NJ, many residents must plan ahead and save money throughout the year. This is the only way some can afford the high taxes in Marlton or Mt Laurel NJ.
Whether you live in Mt Laurel or Marlton New Jersey, the preparation of your taxes by a professional is crucial. These specialist can advise you how to handle preexisting debts or prevent new ones from occurring. If you live in New Jersey or other states with high rates, expert preparation and submission of your taxes can help you avoid further debt and gain financial stability.