Taxation in Montana
If you make $70,000 a year living in Montana you will be taxed $11,822. Your average tax rate is 11.67% and your marginal tax rate is 22%. This marginal tax rate means that your immediate additional income will be taxed at this rate.
State Income Tax Rates
Montana state income tax rate table for the 2023 – 2024 filing season has seven income tax brackets with MT tax rates of 1%, 2%, 3%, 4%, 5%, 6% and 6.75% for Single, Married Filing Jointly, Married Filing Separately, and Head of Household statuses. Montana income tax brackets increased due to an annual inflation adjustment. Outlook for the 2024 Montana income tax rate is to decrease further to 5.9% of taxable income. Montana income tax brackets and rates are scheduled to become simplified beginning tax year 2024. Most residents use the state’s standard deductions and credits to minimize their taxes. Factors like your age, disability, marital status, dependents, and property all affect the amount of taxes you pay.
Montana’s 2024 income tax ranges from 1% to 6.75%. This page has the latest Montana brackets and tax rates, plus a Montana income tax calculator. Montana’s tax brackets are indexed for inflation, and are updated yearly to reflect changes in cost of living.
Use this Montana State Tax Calculator to determine your federal tax amounts, state tax amounts, along with your Medicare and Social Security tax allowances. The adjusted gross income (AGI) used for the federal tax calculator is likely higher than your taxable income in Montana and the tax rates are different than the seven set at the federal level. You can quickly estimate your Montana State Tax and Federal Tax by selecting the tax year, your filing status, Gross Income and Gross Expenses, this is a great way to compare salaries in Montana and for quickly estimating your tax commitments in 2024.
Sales Tax and Real Estate Tax
Is Montana a high tax state?
Montana charges state income tax ranging from 1% to 6.75%. But the state’s shoppers get a break because Montana is one of four states that don’t charge a sales tax at the state or local level. Areas designated as resorts, however, are permitted to charge sales tax of up to 4%. While Montana does have an income tax system, it is not considered a high tax state due to its relatively low rates compared to other states.
The lack of a statewide sales tax further contributes to Montana’s overall lower tax burden. The state’s average effective property tax rate is 0.83%, lower than the national average of 1.07%.
Business and Miscellaneous Taxes
Businesses in Montana pay income taxes based on how they are registered with the IRS. In addition to income tax, businesses may also owe withholding taxes, natural resource taxes, or other, miscellaneous taxes. Local governments collect property taxes in Montana, but the state charges none. Montana does not have a statewide sales tax.
In Montana, the tax brackets are structured progressively, so the higher income you earn, the higher tax rate you pay. Montana allows partnerships and S corporations to be taxed as a business entity if they elect to do so. This tax is called the pass-through entity tax (PTET) and is 6.75% on taxable income.