State Income Tax Help and Pre Tax Deductions
State income tax help is easily found by using pre tax contributions wherever possible. Pre tax deductions lower reportable state W2 income dollar for dollar for
contributions towards: health insurance, dental insurance, vision
insurance, supplemental insurance, flexible spending accounts, and
qualified retirement plans.
The lower the reportable state W2 income as a result of pre tax contributions, the greater the amount of state income tax help. The amount of income tax relief of course depends upon filing status, income level, and work state tax laws.
- Thirty six states collect income taxes on a progressive scale.
- Tax rates go higher as taxable income rises.
- Seven states work on a flat rate schedule:
- CO, IN, MA, NH, PA, TN, AND UT
- Seven states have no income tax at all:
- AL, FL, NV, SD, TX, WA, AND WY
