Best states for high-earners' tax bills
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Many wealthy Americans are finding that taxes are eating up a big chunk of their change with tax season underway.
Some of the changes to the federal tax laws – like new limits on state and local tax deductions – mean burdens in some states could be rising for high-income residents, too.
In order to determine where wealthy residents faced the overall lowest tax burdens by state, WalletHub examined 2018 data across several state-specific points. A high-earner was defined as someone with an income of around $150,000.
Here are the states that will take away the smallest chunk of your cash this tax season.
1. Alaska
Alaska ranked top on the list of the best states, tax-wise, for high-income residents.
For such residents, the total tax burden as a percent of income came out to about 3 percent, compared with 5.87 percent for lower-income residents.
According to WalletHub’s analysis, Alaska’s property taxes as a percent of income on high-earners come out to about 2.2 percent, while there are no income taxes in the state.
2. Nevada
Nevada followed Alaska as the second tax-friendly state for the highest earners.
Property taxes in the state for the wealthy, as a percent of income, come out to about 1.75 percent.
Income taxes as a percent of income on the wealthier residents average about 0.86 percent – and are not much higher for less well-to-do individuals.
The overall tax burden for the highest-earning Nevadans is about 4.31 percent.
3. Wyoming
High earners may also find relief in Wyoming.
Like Alaska, there are no income taxes in Wyoming, while helps reduce tax burdens across the board.
Meanwhile, property taxes as a percent of income are about 2.27 percent.
The overall tax burden in the state? About 5 percent for the wealthy.
4. Tennessee
Like the other states on the list, the income tax burden in Tennessee is low – at 0.11 percent for high-income residents.
Wealthier residents pay 3.32 percent in sales and excise taxes as a percent of income.
The overall tax burden for someone with an income of $150,000 in Tennessee is about 5.11 percent.
5. Florida
Florida — well-known as a tax-friendly locale – ranked fifth on WalletHub’s list.
It also collects no state-wide personal income tax.
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Property taxes in the state for the wealthy are about 3.1 percent as a percent of income.
The overall tax burden comes out to about 5.45 percent.
Worst states
On the flip side, the worst states for high-income earners were Vermont, Maryland, Illinois, Connecticut and New York.