Here at PaycheckCity, we love a great calculator, especially when it illuminates the impact of payroll taxes on take-home pay. Inspired by the fact that states are often in competition with one another over tax rates, the National Center for Policy Analysis has put together a state tax calculator that helps you determine how much money you would make or lose by moving as a result of federal and state tax rates. The calculator shows you how much extra income you would have or lose each year if you lived to 100. In addition, the calculator shows how much any extra income would grow to if you saved the extra money you’d earn by a lower state income tax. For example, a person moving from Connecticut to Florida making $150,000 per year could save over their lifetime $500,000 from moving to Florida. You can find the calculator at whynotmove.org. Pam Villareal, from the National Center for Policy Analysis states that one surprise the calculator illuminated was that you can’t generalize based on the state. For example, people with lower incomes are hit harder by high sales and property taxes so moving to a state with a lower state income tax but higher property taxes might affect you adversely. In other words, you may be better staying put. People with higher incomes on the other hand are hit harder by state income tax, so they may gain from relocating to a state with a lower state income tax level. In creating the calculators, the National Center for Policy analysis assumed that wages would stay the same in each state, will rise with inflation, and that savings would yield 4% per year interest.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.