State Income Tax Overview
California has the highest income tax rates, from 1% to 13.3%. Hawaii’s income tax ranges from 1.4% to 11%. New Jersey’s ranges from 1.4% to 10.75%. Maine has the highest starting rate, 5.8%, but tops out at 7.15%.
Property Tax and Sales Tax
In addition to income and sales taxes, residents pay property taxes based on a property’s market value. New Jersey has the highest property tax rate. Taxes on a median home averaged over $8,000 per year from 2017-2021. Hawaii had the lowest, around $1,915.
Alabama’s income tax ranges from 2% to 5%.
New Hampshire taxes interest and dividends. Legislation passed to phase that out from 2024 to 2027.
Tax Rates Across States
States that don’t tax income typically rely on sales tax to fund their government operations. Tennessee has the nation’s second-highest state sales tax rate–7%. Factoring the combination of state sales tax and average local sales tax, the top five highest total sales tax states as ranked by the Tax Foundation for 2023 are:
- Tennessee 9.548%
- Louisiana 9.547%
- Arkansas 9.51%
- Alabama 9.22%
- Washington 9.21%
Federal Tax Brackets and Adjustments for 2024
Rates range from 10% to 37% in 2024. The 37 percent top rate will hit taxpayers with over 1 million in taxable income in 2024.
The AMT exemption for 2024 is $85,700 for singles and $133,300 for joint filers.
Marginal tax rates apply to the last dollar of income. A single filer with $35,000 of taxable income in 2023 would pay 12%. With $45,000, most would still fall within 12%, but the last few hundred dollars would be taxed at 22%.
For 2024 married filers, the ideal taxable income to limit the federal marginal income tax rate to 24% is $383,900, which is exactly double the single filer threshold for the same rate.
Although 2024 income tax rates remain the same, the IRS has adjusted the tax brackets and deductions for inflation. The standard deduction for 2024 is $14,600 for individuals, up $750, and $29,200 for joint filers, up $1,500.