Overview of Massachusetts Taxation
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Massachusetts Sting Tax
- An additional state tax on income from investments in certain out-of-state companies
- Tax rate is 3% of taxable income if gross receipts equal or exceed $6 million
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LLC Taxation in Massachusetts
- Taxed as a partnership
- Costs include $500 formation fee and $500 annual report fee
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S Corporation Taxation in Massachusetts
- Flow-through taxation
- Shareholders pay additional tax based on company revenue
- 5% flat personal income tax rate
Massachusetts State Taxes
- Individual Income Tax
- Flat 5% rate
- Sales Tax
- 6.25% rate
- Potential Tax Rate Increase
- Voters may approve a 9% tax rate on income over $1 million
- Short-term capital gains over $1 million may be taxed at 16%
Additional Tax Information
- Corporate Excise Tax
- Generally 8% on Massachusetts income plus $2.60 per $1,000 of net worth over $6 million
- IRA Taxation
- Shifting to a Roth IRA can reduce future tax burdens for beneficiaries
Tax Relief and Alternatives
- Starting Rate for Savings
- Relief from tax on income below £17,570
- Full relief if income and interest do not exceed personal allowance plus £5,000
Sin Taxes
- Target goods like alcohol and tobacco
- Aim to discourage use and raise revenue