The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: MDM on September 15, 2017, 11:34:01 PM
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Thanks to https://taxfoundation.org/state-individual-income-tax-rates-brackets-2017/, tax brackets, standard deduction, and exemption amounts for single and MFJ filers in all 50 states and DC have been loaded into the case study spreadsheet (CSS) (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) with version 9.03.
Didn't think the CSS would ever have nearly this detail in state tax calcs, but the Tax Foundation spreadsheet eliminated a huge barrier by collecting all those numbers in one place.
As of this writing, the CSS assumes the taxable income for a state equals the federal AGI minus the state standard deductions and exemptions, and it ignores any state tax credits. Specific state tax calculations are enabled by entering the state postal abbreviation in cell 'Calculations'!I35. The brackets are in the 'State Brackets' tab, and the tax calculation is done in the 'State Tax' tab.
Your suggestions for improvements to this setup are welcome. Suggestions phrased in Excel-ese would be great, but English language comments will likely work as well. In particular, things such as "In this state, ..."
- ...the state EIC is X% of the federal EIC.
- ...Social Security benefits aren't taxed at all.
- ...only interest, dividends, and capital gains are taxed.
- ...HSA contributions are not deductible when calculating state taxable income.
- etc.
would be useful.
Some things may be too inconsequential or difficult to implement - the CSS remains non-commercial and not for actual tax filing - but when someone takes the time to make a suggestion, that in itself suggests the implementation may be worthwhile.
Either post suggestions here or PM me.
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In Texas we have no state income tax. Does that help? Haha
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In Texas we have no state income tax. Does that help? Haha
Believe it or not, that one is already handled. :)
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In no particular order, for PA:
- Taxable wages include 401k contributions, since retirement withdrawals are state-tax free (similarly, early distributions are only partially-taxable since you paid income tax on the contributions going in).
- Losses from one class cannot offset income in another (i.e. business losses cannot reduce wages).
- We have a very complicated and cumbersome local income tax in addition to state taxes. Rates can vary wildly, and is calculated off the nonresident rate where you work, or the resident rate where you live.
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- Taxable wages include 401k contributions,
and 403b, 457, and tIRA - correct?
since retirement withdrawals are state-tax free (similarly, early distributions are only partially-taxable since you paid income tax on the contributions going in).
Is How do I determine if my IRA withdrawals are subject to PA income tax? (https://revenue-pa.custhelp.com/app/answers/detail/a_id/365/related/1/session/L2F2LzEvdGltZS8xNTA1NzkyMTMwL3NpZC9LZUh4aDN0bg%3D%3D) accurate enough (it is from 2002...)?
Appears both the above (aside from complications such as withdrawal of both basis and gain before age 59.5) can be handled. Should be in the next update. Thanks!
- Losses from one class cannot offset income in another (i.e. business losses cannot reduce wages).
Unless this is simpler than it looks, it's probably out of scope for what the CSS tries to cover.
- We have a very complicated and cumbersome local income tax in addition to state taxes. Rates can vary wildly, and is calculated off the nonresident rate where you work, or the resident rate where you live.
If this could be handled by, say, a single tax rate imposed on the state taxable income, that would be doable. If the calculation of taxable income itself is complicated and cumbersome, then "out of scope" is the likely answer.
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Let's see, for the stuff I know about for NYS (not NYC):
State EITC is 30% of federal EITC, but NY also subtracts a tiny little Household Credit from the end result. Can't get both, yikes!
State CTC is 33% of federal CTC, but only for children AT LEAST 4 years old by Dec 31. No idea why young kids don't count. Age 17 cutoff is same as federal.
State tuition credit is $200 on qualified college tuition expenses <$5k, or 4% if total is >$5k but <=$10k max qualified college tuition expenses. Only tuition counts, not fees or books, lab equipment, etc., unlike fed rules. Interestingly, tuition paid by a NY 529 DOES count for the credit, also unlike fed rules.
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For NYS, things I'm beginning to investigate for the future:
Social Security is not taxed.
Pension and annuity income (including IRA withdrawals) : after age 59.5, the first $20k is excluded annually. If MFJ, each get a $20k exclusion, but you cannot use any of a spouse's unused portion (thus it only counts against your personal pension/annuity/IRA).
State/local/federal pensions seem to have their own additional exemption, not clear on the rules.
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I can't check the spreadsheet at the moment, and the 2017 tax year SC1040 for South Carolina is not available yet, but the personal exemption for children under the age of 6 is double the federal personal exemption for South Carolina for 2016 tax year, I doubt they removed that.
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State EITC is 30% of federal EITC, but NY also subtracts a tiny little Household Credit from the end result. Can't get both, yikes!
State CTC is 33% of federal CTC
Social Security is not taxed.
Done, thanks.
Pension and annuity income (including IRA withdrawals) : after age 59.5, the first $20k is excluded annually. If MFJ, each get a $20k exclusion, but you cannot use any of a spouse's unused portion (thus it only counts against your personal pension/annuity/IRA).
Have been considering whether to provide/require more detailed income (e.g., Schedule C) and contributions (e.g., for saver's credit) per person. This will add in favor of doing so....
State tuition credit is $200 on qualified college tuition expenses <$5k, or 4% if total is >$5k but <=$10k max qualified college tuition expenses. Only tuition counts, not fees or books, lab equipment, etc., unlike fed rules. Interestingly, tuition paid by a NY 529 DOES count for the credit, also unlike fed rules.
Probably won't include this, especially if it is not income-dependent (i.e., wouldn't affect a marginal rate).
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...but only for children AT LEAST 4 years old by Dec 31. No idea why young kids don't count. Age 17 cutoff is same as federal.
...the personal exemption for children under the age of 6 is double the federal personal exemption for South Carolina for 2016 tax year, I doubt they removed that.
Currently don't ask for individual children's ages (other than asking the number of children who meet various federal cutoffs). Probably won't add that anytime soon, at least not before asking for individual adults' situations (see previous post). But it's on the list.... ;)
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...but only for children AT LEAST 4 years old by Dec 31. No idea why young kids don't count. Age 17 cutoff is same as federal.
...the personal exemption for children under the age of 6 is double the federal personal exemption for South Carolina for 2016 tax year, I doubt they removed that.
Currently don't ask for individual children's ages (other than asking the number of children who meet various federal cutoffs). Probably won't add that anytime soon, at least not before asking for individual adults' situations (see previous post). But it's on the list.... ;)
Yeah I only brought it up because I was just reading that pdf from the state before I read this thread and I have 2/3 kids under 5 this year.
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...but only for children AT LEAST 4 years old by Dec 31. No idea why young kids don't count. Age 17 cutoff is same as federal.
...the personal exemption for children under the age of 6 is double the federal personal exemption for South Carolina for 2016 tax year, I doubt they removed that.
Currently don't ask for individual children's ages (other than asking the number of children who meet various federal cutoffs). Probably won't add that anytime soon, at least not before asking for individual adults' situations (see previous post). But it's on the list.... ;)
Yeah I only brought it up because I was just reading that pdf from the state before I read this thread and I have 2/3 kids under 5 this year.
Appears you are more informed than the average bear. Well done! We have our own tax spreadsheet containing all our relevant nuances, but it would be much work to generalize it for others. I don't envy the commercial folks who have to keep up with all the 40-some state income tax regulations - but, they do get paid for it....
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In MA, you can deduct 50% of your rent up to $6,000 (so a $3,000 max deduction)
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In MA, you can deduct 50% of your rent up to $6,000 (so a $3,000 max deduction)
Done, thanks.
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In Tennessee we don't have a normal income tax (rather a pretty regressive sales tax), but we do have
the Hall Income Tax (https://en.wikipedia.org/wiki/Hall_income_tax), applied to all taxable interest and dividend income over $1250 per person
($2500 for married couples).
Last year (2016) it was reduced from 6% to 5% and is on track to be phased out at 1% per
year.
Personally it had no impact on my retirement plans, but my father was paying the 6% on
about $30K of taxable income, so the phase-out is meaningful to him.
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In Tennessee we don't have a normal income tax (rather a pretty regressive sales tax), but we do have
the Hall Income Tax (https://en.wikipedia.org/wiki/Hall_income_tax), applied to all taxable interest and dividend income over $1250 per person
($2500 for married couples).
Last year (2016) it was reduced from 6% to 5% and is on track to be phased out at 1% per
year.
Thanks!
Does that mean
- 2017 rate is 4%, and
- deduction is $1250 for single filers, and $2500 for MFJ, regardless of the number of dependents?
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In Tennessee we don't have a normal income tax (rather a pretty regressive sales tax), but we do have
the Hall Income Tax (https://en.wikipedia.org/wiki/Hall_income_tax), applied to all taxable interest and dividend income over $1250 per person
($2500 for married couples).
Last year (2016) it was reduced from 6% to 5% and is on track to be phased out at 1% per
year.
Thanks!
Does that mean
- 2017 rate is 4%, and
- deduction is $1250 for single filers, and $2500 for MFJ, regardless of the number of dependents?
Correct.
Also, blind people and people over 65 years old whose total annual income is $37,000 or less
($68,000 for joint filers) are not subject to the Hall income tax (http://www.tn.gov/assets/entities/revenue/attachments/indincguide.pdf).
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Correct.
Also, blind people and people over 65 years old whose total annual income is $37,000 or less
($68,000 for joint filers) are not subject to the Hall income tax (http://www.tn.gov/assets/entities/revenue/attachments/indincguide.pdf).
Done, thanks - except it treats anything entered as interest or dividends as taxable, notwithstanding the official 9 categories of taxable and 13 categories of non-taxable in that document. ;)
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- Taxable wages include 401k contributions,
and 403b, 457, and tIRA - correct?
Correct. I was using "401k" in the generic sense, not the technical sense.
since retirement withdrawals are state-tax free (similarly, early distributions are only partially-taxable since you paid income tax on the contributions going in).
Is How do I determine if my IRA withdrawals are subject to PA income tax? (https://revenue-pa.custhelp.com/app/answers/detail/a_id/365/related/1/session/L2F2LzEvdGltZS8xNTA1NzkyMTMwL3NpZC9LZUh4aDN0bg%3D%3D) accurate enough (it is from 2002...)?
I'll see if I can find anything more recent to double-check
Appears both the above (aside from complications such as withdrawal of both basis and gain before age 59.5) can be handled. Should be in the next update. Thanks!
- Losses from one class cannot offset income in another (i.e. business losses cannot reduce wages).
Unless this is simpler than it looks, it's probably out of scope for what the CSS tries to cover.
Yea, your formula would be dependent on income class and would have to be greater of 0 or taxable income by class
- We have a very complicated and cumbersome local income tax in addition to state taxes. Rates can vary wildly, and is calculated off the nonresident rate where you work, or the resident rate where you live.
If this could be handled by, say, a single tax rate imposed on the state taxable income, that would be doable. If the calculation of taxable income itself is complicated and cumbersome, then "out of scope" is the likely answer.
I don't think it's easily implemented. I've moved a couple times in the few years. Some places my local tax rate was 1%,
some it was 1.5%, and some it was 2%. It's going to be dependent on the school district and township that the individual lives in.
Plus, taxable income for local purposes is only on "earned" income, so it isn't even the same taxable income as the state calculation.
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Various suggestions prior to this post have been incorporated in version 9.03.
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Question:
I'm filing HOH for 2018 for federal, which the spreadsheet supports. I live in Idaho, and federal HOH means I use the MFJ Idaho tax table. Is this working properly in the spreadsheet? I'm not saying it does or doesn't, I'm just saying I'm lazy and don't want to try to decipher the Excel-ese (it's some big OFFSET() with concatenation or something).
Comments:
Idaho passed new lower income tax brackets in effect for 2018 here:
https://legislature.idaho.gov/sessioninfo/billbookmark/?yr=2018&bn=H0463
They also instituted a $205 per kid under 17 nonrefundable credit to account for the change in exemptions in the TCJA.
Thanks!
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Question:
I'm filing HOH for 2018 for federal, which the spreadsheet supports. I live in Idaho, and federal HOH means I use the MFJ Idaho tax table. Is this working properly in the spreadsheet?
Unlikely. :)
No promises, but I'll take a look and see if that and the other items can be accommodated.
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In Arkansas
... Only 1/2 of long term capital gains are taxed. See https://www.dfa.arkansas.gov/images/uploads/incomeTaxOffice/AR1000DCapitalGains.pdf
... Married filing separately is generally advantageous (unless one spouse makes under the $2200 standard deduction) as there is only one set of brackets regardless of filing status. See https://www.dfa.arkansas.gov/images/uploads/incomeTaxOffice/AR1000FFullYearResidentIndIncTaxRet.pdf
... Joint income can be attributed to the primary filer, so making the lower income spouse primary is advantageous as it will expose joint income (such as interest and investment income) to a lower bracket.
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Question:
I'm filing HOH for 2018 for federal, which the spreadsheet supports. I live in Idaho, and federal HOH means I use the MFJ Idaho tax table. Is this working properly in the spreadsheet?
Unlikely. :)
No promises, but I'll take a look and see if that and the other items can be accommodated.
Thanks!!
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In Arkansas
... Only 1/2 of long term capital gains are taxed. See https://www.dfa.arkansas.gov/images/uploads/incomeTaxOffice/AR1000DCapitalGains.pdf
That seems doable.
... Married filing separately is generally advantageous (unless one spouse makes under the $2200 standard deduction) as there is only one set of brackets regardless of filing status. See https://www.dfa.arkansas.gov/images/uploads/incomeTaxOffice/AR1000FFullYearResidentIndIncTaxRet.pdf
... Joint income can be attributed to the primary filer, so making the lower income spouse primary is advantageous as it will expose joint income (such as interest and investment income) to a lower bracket.
Given the general complexity of MFS, and the relatively few (https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-filing-status) (2% MFS, 48% S, 36% MFJ, and 14% HOH) filing that way, MFS is out of scope - sorry.
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Idaho and Arkansas calculations modified per above. See https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/msg2138684/#msg2138684.
If the modifications work, great! If not, please advise what is incorrect.
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... Married filing separately is generally advantageous (unless one spouse makes under the $2200 standard deduction) as there is only one set of brackets regardless of filing status. See https://www.dfa.arkansas.gov/images/uploads/incomeTaxOffice/AR1000FFullYearResidentIndIncTaxRet.pdf
... Joint income can be attributed to the primary filer, so making the lower income spouse primary is advantageous as it will expose joint income (such as interest and investment income) to a lower bracket.
Given the general complexity of MFS, and the relatively few (https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-filing-status) (2% MFS, 48% S, 36% MFJ, and 14% HOH) filing that way, MFS is out of scope - sorry.
No worries. As far as those stats Federal MFS and Arkansas state have no bearing on one another though as you can file whichever way you want regardless of federal status. For the Arkansas version your choices are essentially to file MFJ and get a doubled standard deduction but use the same brackets as single, or file as if each person is single, so it just comes down to separating income by who it belongs to and then performing the same calculation for both and adding up the total tax.
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Some people plan to move abroad as part of their retirement plan, so you might include "None" or "Foreign Territory" in that list. Especially if the State Tax tab becomes mandatory.
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Some people plan to move abroad as part of their retirement plan, so you might include "None" or "Foreign Territory" in that list. Especially if the State Tax tab becomes mandatory.
Leaving the state name blank will cause $0 for state tax.
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ID state tax calculations look correct (well, ID has weird stuff which isn't accounted for, but for what I pointed out it's right). Thanks!!
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For Georgia, please incorporate the $65,000 exemption for age 65 and older:
Social Security income is exempt, and so is up to $35,000 of most types of retirement income for those age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer.
Thank you!
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For Georgia, please incorporate the $65,000 exemption for age 65 and older:
Social Security income is exempt, and so is up to $35,000 of most types of retirement income for those age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer.
Thank you!
That appears doable.
The SS exemption is already there.
For "most types" would that be both pension and tIRA withdrawals (cells D31 and D32 on the Calculations tab)? Anything else?
If MFJ, do the $35K/$65K apply individually by age, or by the age of the oldest?
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That appears doable.
The SS exemption is already there.
For "most types" would that be both pension and tIRA withdrawals (cells D31 and D32 on the Calculations tab)? Anything else?
If MFJ, do the $35K/$65K apply individually by age, or by the age of the oldest?
[/quote]
Here is the most complete answer I could find. I have to admit I find the sentence under Individual Retirement Accounts confusing. I’ll try to find an answer.
2019 UPDATE for 2018 Tax Yead
Does Georgia tax Social Security?
No The Taxable Social Security and Railroad Retirement amount shown on the Federal return are exempt from Georgia Income Tax. The taxable portion shown on the Federal return is subtracted on schedule 1 of Form 500.
Does Georgia offer any income tax relief for retirees?
Yes. A retirement exclusion is allowed provided the taxpayer is 62 years of age or older, or the taxpayer is totally and permanently disabled. Retirement income includes items such as: interest, dividends, net rentals, capital gains, royalties, pensions, annuities, and the first $4000.00 of earned income. Earned income is income from a trade or business, wages, salaries, tips, or other compensation. Refer to the instruction booklet for the amount of the exclusion and for additional information.
Individual Retirement Accounts.
The provisions concerning taxability and conversion from a traditional IRA to a Roth IRA are the same for Georgia and the Internal Revenue Service.
Georgia does not tax Social Security retirement benefits and provides a deduction of $65,000 per person on all types of retirement income for anyone 64 or older.
The Sick pay (that was mentioned in the opriginal question) on the W-2 would not appear to be relevant to discussion of Retirement Income. The Social Security Disability benefit - that is not clear in Georgia documentation.
For married couples filing joint returns with both members receiving retirement income, the maximum adjustment for that year may be up to twice the individual exclusion amount. Retirement income exceeding the maximum adjustable amount will be taxed at the normal rate.
When calculating Georgia income taxes, both Georgia pensions and out-of-state pensions count as sources of income, which means these funds are subject to taxation. Georgia offers a large retirement exclusion, which allows you to deduct a portion of your retirement income from your taxable income to help lower your tax burden. As of 2015, you can deduct up to $35,000 of retirement income if you are between the ages of 62 and 64 or permanently disabled. At age of 65, you can deduct up to $65,000.
If you are married, both you and your spouse can qualify for this deduction, but you must qualify separately based on age or disability.
Georgia Dept of Revenue: Retirement Income Exclusion
Taxpayers who are 62 or older, or permanently and totally disabled regardless of age, may be eligible for a retirement income adjustment on their Georgia tax return. Retirement income includes:
Income from pensions and annuities
Interest income
Dividend income
Net income from rental property
Capital gains income
Income from royalties
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For "most types" would that be both pension and tIRA withdrawals (cells D31 and D32 on the Calculations tab)? Anything else?
Here is the most complete answer I could find. I have to admit I find the sentence under Individual Retirement Accounts confusing. I’ll try to find an answer.
[/quote]
According to my accountant, it does apply to both pension and tIRA withdrawals. Note he also said that for any income reported on a W2, the exemption is limited to $4,000.
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For "most types" would that be both pension and tIRA withdrawals (cells D31 and D32 on the Calculations tab)? Anything else?
Here is the most complete answer I could find. I have to admit I find the sentence under Individual Retirement Accounts confusing. I’ll try to find an answer.
According to my accountant, it does apply to both pension and tIRA withdrawals. Note he also said that for any income reported on a W2, the exemption is limited to $4,000.
Wow, that's quite the breadth of exclusions!
Still doable, just not right away. ;)
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For Georgia, please incorporate the $65,000 exemption for age 65 and older:
Social Security income is exempt, and so is up to $35,000 of most types of retirement income for those age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer.
Thank you!
Mkaytn17, give the attached a try. It won't handle all permutations, but perhaps enough? Let me know....
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Mkaytn17, give the attached a try. It won't handle all permutations, but perhaps enough? Let me know....
@Mkaytn17, I'm assuming no news is good news and will upload the GA changes soon.
Also adding a similar exclusion for up to $20K/person over age 59.5 in NY for pension & IRA income.
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So sorry, I’ve been pulling grandma babysitting duties all week and haven’t had the opportunity to try it yet. On the other hand, this will be my first attempt with the spreadsheet so I’m not guaranteeing I’ll know whether it’s right or wrong!
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@MDM, in another thread you said
If someone knows of a state-by-state description of applicable 529 laws, posting something in State Income Tax calculations - Crowdsourcing request (https://forum.mrmoneymustache.com/taxes/state-income-tax-calculations-crowdsourcing-request/) might get some traction....
The table found on the second page here might fit the bill: https://www.blackrock.com/us/individual/literature/brochure/529-plans-and-state-tax-benefits-client-piece-en-us.pdf
Not reflected there is that most states require the contribution to be to that state's 529, but there are a number of states that allow the deduction regardless of the plan used: https://www.savingforcollege.com/article/how-much-is-your-state-s-529-plan-tax-deduction-really-worth
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@MDM, in another thread you said
If someone knows of a state-by-state description of applicable 529 laws, posting something in State Income Tax calculations - Crowdsourcing request (https://forum.mrmoneymustache.com/taxes/state-income-tax-calculations-crowdsourcing-request/) might get some traction....
The table found on the second page here might fit the bill: https://www.blackrock.com/us/individual/literature/brochure/529-plans-and-state-tax-benefits-client-piece-en-us.pdf
Not reflected there is that most states require the contribution to be to that state's 529, but there are a number of states that allow the deduction regardless of the plan used: https://www.savingforcollege.com/article/how-much-is-your-state-s-529-plan-tax-deduction-really-worth
Thanks, that table did make it not too bad an effort. Not planning to implement some of the exceptional items (e.g., unlimited deduction for age 70+ Virginians; Minnesota's deduction/credit rules; etc.). Implementation assumes that any 529 contributions one makes go to the state of residence, etc.
Need to run it through the rigorous beta testing process ;) first and will then upload it.
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Idaho residents can add $1300 for each person over 65 (and an additional $1300 for each blind person) to the standard deduction. Or $1600 if single or HOH and over 65. Here's the language from the Idaho tax instructions:
"If born before January 2, 1954, or blind, multiply the total number of boxes checked on Form 40, lines 13a and 13b, by $1,300 ($1,600 if single or head of household)."
It wouldn't be exactly right, but I think it would be closer to put $1300 in $"State Tax".G34 if I understand how you're doing it. If you wanted to get fancier and closer you could condition the value on filing status. I wouldn't bother with the blind part of it.
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Idaho residents can add $1300 for each person over 65 (and an additional $1300 for each blind person) to the standard deduction. Or $1600 if single or HOH and over 65. Here's the language from the Idaho tax instructions:
"If born before January 2, 1954, or blind, multiply the total number of boxes checked on Form 40, lines 13a and 13b, by $1,300 ($1,600 if single or head of household)."
It wouldn't be exactly right, but I think it would be closer to put $1300 in $"State Tax".G34 if I understand how you're doing it. If you wanted to get fancier and closer you could condition the value on filing status. I wouldn't bother with the blind part of it.
Appears putting =IF(B1=2,1600,1300) into 'State Tax'!G34 would indeed work, so that can go in the next revision (and you could modify the version you are using).
A larger issue might be the standard deduction for Idaho HOH filers ($18,350 I'd guess for 2019). The state tables published by the taxfoundation.org folks (https://taxfoundation.org/2019-state-individual-income-tax-rates-brackets) don't have HOH tables for any states. Researching HOH tables for all states with income tax is a bit much to digest. Now, if someone had HOH tables already compiled....
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Idaho residents can add $1300 for each person over 65 (and an additional $1300 for each blind person) to the standard deduction. Or $1600 if single or HOH and over 65. Here's the language from the Idaho tax instructions:
"If born before January 2, 1954, or blind, multiply the total number of boxes checked on Form 40, lines 13a and 13b, by $1,300 ($1,600 if single or head of household)."
It wouldn't be exactly right, but I think it would be closer to put $1300 in $"State Tax".G34 if I understand how you're doing it. If you wanted to get fancier and closer you could condition the value on filing status. I wouldn't bother with the blind part of it.
Appears putting =IF(B1=2,1600,1300) into 'State Tax'!G34 would indeed work, so that can go in the next revision (and you could modify the version you are using).
A larger issue might be the standard deduction for Idaho HOH filers ($18,350 I'd guess for 2019). The state tables published by the taxfoundation.org folks (https://taxfoundation.org/2019-state-individual-income-tax-rates-brackets) don't have HOH tables for any states. Researching HOH tables for all states with income tax is a bit much to digest. Now, if someone had HOH tables already compiled....
Yeah, Idaho basically follows Federal for standard deduction (I think), but HOH brackets are the same as MFJ here, which is...odd. (But I file HOH, so I'm fine with it.)
Thanks for all the work you do on this.
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Thanks once again to the folks at Tax Foundation (https://taxfoundation.org/) for aggregating at least the basics for all state and D.C. income taxes.
State tax brackets and rates updated for 2020 (https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/msg2556007/#msg2556007) in the case study spreadsheet.
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can someone please explain how local tax (tax % based on federal AGI) is supposed to be calculated? perhaps with an example?
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can someone please explain how local tax (tax % based on federal AGI) is supposed to be calculated? perhaps with an example?
See cell Calculations!H36.
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@MDM For Tennessee, the Hall Tax has been fully repealed as of Jan 1, 2021:
https://en.wikipedia.org/wiki/Hall_income_tax
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can someone please explain how local tax (tax % based on federal AGI) is supposed to be calculated? perhaps with an example?
See cell Calculations!H36.
i see the 'tax % based on federal AGI', but i am not sure what that means/where to get those numbers from to calculate it (& what a local tax even is?)
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can someone please explain how local tax (tax % based on federal AGI) is supposed to be calculated? perhaps with an example?
See cell Calculations!H36.
i see the 'tax % based on federal AGI', but i am not sure what that means/where to get those numbers from to calculate it (& what a local tax even is?)
Some cities impose an income tax. That would be an example of a local tax.
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@MDM For Tennessee, the Hall Tax has been fully repealed as of Jan 1, 2021:
https://en.wikipedia.org/wiki/Hall_income_tax
Thanks for the note, and good for Tennessee!
I use the compilation done by State Individual Income Tax Rates and Brackets | Tax Foundation (https://taxfoundation.org/publications/state-individual-income-tax-rates-and-brackets/) for bulk revisions of state brackets. The new version usually comes out in February.
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On the California State tax return, it's sometimes preferrable to itemize even if you don't itemize on the Federal return. In my case this is due to a large Sales Tax event (large purchase). Is there a way to represent this State itemized deduction (or reduced taxable income), instead of the standard deduction in the Case Study Spreadsheet, due to choosing to claim the Sales Tax vs State Income Tax?
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On the California State tax return, it's sometimes preferrable to itemize even if you don't itemize on the Federal return. In my case this is due to a large Sales Tax event (large purchase). Is there a way to represent this State itemized deduction (or reduced taxable income), instead of the standard deduction in the Case Study Spreadsheet, due to choosing to claim the Sales Tax vs State Income Tax?
The simplest way, if your itemized deduction is not income-dependent, is to put the itemized amount into cell 'State Tax'!E27 or 'State Tax'!F27 depending on your filing status. Will that suffice?
Don't know if it is "the most", but California has at least "one of the most" complicated state tax codes, and IIRC they don't even tell people the bracket boundaries until the end of the tax year, so take any result with a few grains of salt until you can verify it.
There are enough residents in CA that I'd be willing to add some useful complexity if you or anyone can describe it, particularly if the description includes Excel formulas. ;)
Alternatively, elect different state legislators (of either party) who will simplify your state tax code. :)
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Thank you! That'll suffice for my situation since it seems income independent.
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NARFE always has good information on state taxation of federal pensions and other types of retirement accounts that federal retirees have.
The April 2022 version is contained on page 25-26 of this PDF: https://issuu.com/narfe/docs/narfe_0422_web
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Truly love this spreadsheet for tax calculations. I assume this feature I'm requesting does not exist, since I've been unable to find it. Having the ability to separate out US Treasury interest income from sources like T-Bills, Savings Bonds, etc. would allow you to exempt that income from State taxes. With the huge increase in interest rates over the last year, this becomes a much more valuable feature since there could be a significant state tax difference. I have workarounds, but would much prefer it to be integrated since California has so many brackets.
Thanks for all the great work on this.
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Truly love this spreadsheet for tax calculations. I assume this feature I'm requesting does not exist, since I've been unable to find it. Having the ability to separate out US Treasury interest income from sources like T-Bills, Savings Bonds, etc. would allow you to exempt that income from State taxes. With the huge increase in interest rates over the last year, this becomes a much more valuable feature since there could be a significant state tax difference. I have workarounds, but would much prefer it to be integrated since California has so many brackets.
Thanks for all the great work on this.
You're welcome!
That would be doable, but it also starts down the slippery slope that includes municipal bond interest taxable in your state vs. municipal bond interest not taxable in your state, etc.
As an immediate "integrated workaround," would entering the US Treasury interest as "Rental income" in cell Calculations!B33, then putting =E10 in cell 'State Tax'!M27 give you all the functionality you need? That wouldn't work if you have actual rental income, but...?
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Yes, I could see that would add some complexity for each state. I may be wrong, but seems like Treasury interest would be a more common scenario.
Unfortunately I do have Rental Income, so your workaround would be a bit trickier (considered using Alimony, which I don't have), but I think I could make it work if cell 'State Tax'!M27 was not protected. Am I missing something on how to enter the =E10?
On a separate California only point, I notice you deduct HSA contributions from Income which is not allowed in California and two other states.
I'm probably grossly oversimplifying, but maybe an income category called "Federal Only income (not included in State)"? The trick is the user has to be sure that income isn't in any other categories. In my case I'd have to combine expected HSA contributions and US Treasury interest to arrive at one number only and not use your HSA contribution cells.
Slippery slopes all over the place for you.
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Unfortunately I do have Rental Income, so your workaround would be a bit trickier (considered using Alimony, which I don't have), but I think I could make it work if cell 'State Tax'!M27 was not protected. Am I missing something on how to enter the =E10?
There is no password on the protection. Caveat user.
Go to the 'State Tax' tab, then click Review > Unprotect Sheet (or Review > Protect > Unprotect Sheet, if your menu is condensed). Does that work?
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I believe the KY State tax calculation is incorrect. KY residents get taxable SS excluded, plus an additional $31,110 per taxpayer excluded (Fed AGI - Taxable SS - $31,110 = KY AGI (Single)). Can anyone else confirm or correct me? Thanks, great forum!
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I believe the KY State tax calculation is incorrect. KY residents get taxable SS excluded, plus an additional $31,110 per taxpayer excluded (Fed AGI - Taxable SS - $31,110 = KY AGI (Single)). Can anyone else confirm or correct me? Thanks, great forum!
Thanks for the feedback!
The taxable SS is already being excluded.
2023 State Income Tax Rates and Brackets | Tax Foundation (https://taxfoundation.org/data/all/state/state-income-tax-rates-2023/) doesn't mention anything about it, but based on https://revenue.ky.gov/Forms/Schedule%20M%202022.pdf up to $31,110 of pension benefits and traditional account withdrawals may be subtracted. There are some other wrinkles (disability income, extra subtraction for government retirees, etc.) but for your purposes would a formula of =MAX(-B11-E11,-31110) in cell 'State Tax'!O39 suffice?
Is the $2,770 standard deduction correct?
For 2023, a $10K tIRA withdrawal, $30K pension, and $25K SS benefit ($20,225 of which is taxable), federal AGI is $60,225. With the above formula in place, KY taxable income is $6,120 ($60,225 - $20,225 - $31,110 - $2,770) - correct?
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That formula is close. I believe it's $31,110 per taxpayer, so I used =IF($B$2=1,MAX(-B11-E11,-31110),MAX(-B11-E11,-31110)*2).
The standard deduction is $2,980 for 2023 (double for MFJ).
For 2023, a $74,000 tIRA withdrawal, $7,200 pension, and $33,600 SS benefit ($28,560 of which is taxable), federal AGI is $109,760. With the above formula in place, KY taxable income is $47,110 ($110,760 - $28,560 - $31,110 - $2,980). I'm not a CPA, so happy to be corrected if needed.
So glad I found this website, it is awesome. I'm actually a financial advisor and I've been building my own tax spreadsheet on and off for about 3 years. This one absolutely blows mine out of the water! So grateful to have found it.
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That formula is close. I believe it's $31,110 per taxpayer
Indeed it is!
, so I used =IF($B$2=1,MAX(-B11-E11,-31110),MAX(-B11-E11,-31110)*2).
We can't double the actual pension amount, so does =MAX(-B11-E11,-31110*IF($B$2=2,2,1)) work?
The standard deduction is $2,980 for 2023 (double for MFJ).
Was $2770 correct for 2022? Any projection for 2024 yet? Perhaps something like =IF($B$21=2022,2770,IF($B$21=2023,2980,3190)) in cell 'State Tax'!E39 and =E39*2 in F39?
For 2023, a $74,000 tIRA withdrawal, $7,200 pension, and $33,600 SS benefit ($28,560 of which is taxable), federal AGI is $109,760. With the above formula in place, KY taxable income is $47,110 ($110,760 - $28,560 - $31,110 - $2,980).
Now we're poised at the top of a slippery slope. ;)
That calculation works for a single filer, but becomes problematic for MFJ, because the KY law says the $31,110 limit must be imposed separately on each spouse. Thus out of the $81,200 total retirement income amount, anywhere from $31,110 to $62,220 could be subtractable depending on how that income was split between the spouses. Commercial tax software for filing purposes should easily make that distinction.
It's almost easily doable here, because we already have separate entries for pension income by spouse, but only one entry (Calculations!D31) for traditional account withdrawals. It wouldn't be too hard to change Calculations!D31 to be calculated as B31+C31, but that could cause confusion for folks following nice tutorials such as Roth Conversion and Capital Gains On ACA Health Insurance (https://thefinancebuff.com/tax-calculator-aca-obamacare-subsidy.html) and Roth Conversion with Social Security and Medicare IRMAA (https://thefinancebuff.com/roth-conversion-social-security-medicare-irmaa.html).
Your thoughts?
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That calculation works for a single filer, but becomes problematic for MFJ, because the KY law says the $31,110 limit must be imposed separately on each spouse. Thus out of the $81,200 total retirement income amount, anywhere from $31,110 to $62,220 could be subtractable depending on how that income was split between the spouses. Commercial tax software for filing purposes should easily make that distinction.
It's almost easily doable here, because we already have separate entries for pension income by spouse, but only one entry (Calculations!D31) for traditional account withdrawals. It wouldn't be too hard to change Calculations!D31 to be calculated as B31+C31, but that could cause confusion for folks following nice tutorials such as Roth Conversion and Capital Gains On ACA Health Insurance (https://thefinancebuff.com/tax-calculator-aca-obamacare-subsidy.html) and Roth Conversion with Social Security and Medicare IRMAA (https://thefinancebuff.com/roth-conversion-social-security-medicare-irmaa.html).
NY (and maybe other states?) also has a pension and retirement account income subtraction that has limits for each individual, instead of a total MFJ limit that some other states have. I'm leaning toward handling the individual calculations, even though one would then need to use B31 (or C31) instead of D31 for the marginal rate chart....
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Great info on the replies. I agree that we'll need to separate out the income by individuals. Easily done on the Calculations tab, but still trying to figure out the best way to do it on the State Tax tab. Any thoughts here? I'm probably overcomplicating it and maybe it's just a formula or two.
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Great info on the replies. I agree that we'll need to separate out the income by individuals. Easily done on the Calculations tab, but still trying to figure out the best way to do it on the State Tax tab. Any thoughts here? I'm probably overcomplicating it and maybe it's just a formula or two.
Do the separate entries for each spouse's pension and IRA/401k/403b/etc. withdrawals (https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/msg3197259/#msg3197259) in the latest version work for you?
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Idaho only applies the 5.8% flat tax above $2500 (single) and $5,000 (MFJ). The $2,500/$5,000 acts like an additional Idaho-only standard deduction. You probably only have a handful of Idaho filers, but I think it's an easy fix. Maybe in State Tax!H34 and State Tax!I34?
I looked at https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf and https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf but didn't see the personal exemptions. Could you point me toward an Idaho state document regarding those?
Yes, it would be an easy fix and I'd be happy to do it. Some of the other intricacies, e.g., the retirement income subtraction for Public Service retirees (Form 29R line B8) would be a bit much. ;)
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Idaho only applies the 5.8% flat tax above $2500 (single) and $5,000 (MFJ). The $2,500/$5,000 acts like an additional Idaho-only standard deduction. You probably only have a handful of Idaho filers, but I think it's an easy fix. Maybe in State Tax!H34 and State Tax!I34?
I looked at https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf and https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf but didn't see the personal exemptions. Could you point me toward an Idaho state document regarding those?
Yes, it would be an easy fix and I'd be happy to do it. Some of the other intricacies, e.g., the retirement income subtraction for Public Service retirees (Form 29R line B8) would be a bit much. ;)
It's a new law, so you won't see it in the 2022 tax documents, and Idaho apparently hasn't published 2023 documents yet.
The law is HB1, here's the text:
https://legislature.idaho.gov/wp-content/uploads/sessioninfo/2022extra1/legislation/H0001.pdf
See page 3 of that PDF, lines 26 through 35.
They did this because Idaho wanted to go to a flat tax rate, but they also wanted to promise that everyone would pay lower taxes. Since Idaho had some very small low rate brackets at the beginning of their bracket structure, they had to add this additional exemption/standard deduction thing to accomplish both those goals.
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Idaho only applies the 5.8% flat tax above $2500 (single) and $5,000 (MFJ). The $2,500/$5,000 acts like an additional Idaho-only standard deduction. You probably only have a handful of Idaho filers, but I think it's an easy fix. Maybe in State Tax!H34 and State Tax!I34?
I looked at https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf and https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_12-30-2022.pdf but didn't see the personal exemptions. Could you point me toward an Idaho state document regarding those?
Yes, it would be an easy fix and I'd be happy to do it. Some of the other intricacies, e.g., the retirement income subtraction for Public Service retirees (Form 29R line B8) would be a bit much. ;)
It's a new law, so you won't see it in the 2022 tax documents, and Idaho apparently hasn't published 2023 documents yet.
The law is HB1, here's the text:
https://legislature.idaho.gov/wp-content/uploads/sessioninfo/2022extra1/legislation/H0001.pdf
See page 3 of that PDF, lines 26 through 35.
They did this because Idaho wanted to go to a flat tax rate, but they also wanted to promise that everyone would pay lower taxes. Since Idaho had some very small low rate brackets at the beginning of their bracket structure, they had to add this additional exemption/standard deduction thing to accomplish both those goals.
Yes, $2,500 in H34 and $5,000 in I34 should work just fine and will be in the next release. You could edit the current version just as well - thanks for the update!
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In Indiana,
... State tax rate is 3.23%, 'State Brackets'!D58. Currently in spreadsheet it is 3.15%
... 529 Contribution limit (for tax credit) for MFJ couple is 7500$, 'State Tax'!T36. Currently in spreadsheet it is 5000$
... It appears that Local Tax Calculation G39 is based on Federal AGI, I believe for Indiana Local Tax is actually based on Indiana State AGI( Federal AGI minus state deductions & exemptions)
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sk_y, welcome to the forum.
In Indiana,
... State tax rate is 3.23%, 'State Brackets'!D58. Currently in spreadsheet it is 3.15%
... 529 Contribution limit (for tax credit) for MFJ couple is 7500$, 'State Tax'!T36. Currently in spreadsheet it is 5000$
Thanks! These will be in the next release.
... It appears that Local Tax Calculation G39 is based on Federal AGI, I believe for Indiana Local Tax is actually based on Indiana State AGI( Federal AGI minus state deductions & exemptions)
This one is on the slippery slope that leads to commercial grade tax software that covers all possible state and local tax situations, so I leave it to individuals to modify the CSS as needed for their own use. As is, the CSS will still include Indiana Local Tax correctly for marginal tax rates, provided there would be a non-zero tax amount in reality.
The tweaks on state tax rate and the 529 contribution limit are exactly the sort of things this thread is for. 2023 State Income Tax Rates and Brackets | Tax Foundation (https://taxfoundation.org/data/all/state/state-income-tax-rates-2023/) is the default source, but things can and do change.
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In California, the $140 exemption credit for each taxpayer (two for MFJ) are doubled for age 65 and over.
In my copy of CashFlow (the 2022 2023 2024 version), I changed H27 from it's prior entry of '$140' to '=140+if(C5>=65,140,0)' and I27 from it's prior entry of '$280' to '=280+if(C5>=65,140,0)+if(and(B2=2,D5>=65),140,0)'
You may wish to adopt this or something similar.
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In California, the $140 exemption credit for each taxpayer (two for MFJ) are doubled for age 65 and over.
In my copy of CashFlow (the 2022 2023 2024 version), I changed H27 from it's prior entry of '$140' to '=140+if(C5>=65,140,0)' and I27 from it's prior entry of '$280' to '=280+if(C5>=65,140,0)+if(and(B2=2,D5>=65),140,0)'
You may wish to adopt this or something similar.
Thanks, it's great when suggestions are accompanied by solutions!
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sk_y, welcome to the forum.
In Indiana,
... State tax rate is 3.23%, 'State Brackets'!D58. Currently in spreadsheet it is 3.15%
Per DOR: Tax Rates Fees & Penalties (https://www.in.gov/dor/business-tax/tax-rates-fees-and-penalties/), the 2024 rate is 3.05% so that will be the number in the release to be made shortly.
... 529 Contribution limit (for tax credit) for MFJ couple is 7500$, 'State Tax'!T36. Currently in spreadsheet it is 5000$
Appears the single filer (not MFS) limit is also $7500.
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In California, the $140 exemption credit for each taxpayer (two for MFJ) are doubled for age 65 and over.
In my copy of CashFlow (the 2022 2023 2024 version), I changed H27 from it's prior entry of '$140' to '=140+if(C5>=65,140,0)' and I27 from it's prior entry of '$280' to '=280+if(C5>=65,140,0)+if(and(B2=2,D5>=65),140,0)'
You may wish to adopt this or something similar.
Thanks, it's great when suggestions are accompanied by solutions!
Done for the version about to be uploaded. Thanks again.
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Idaho only applies the 5.8% flat tax above $2500 (single) and $5,000 (MFJ). The $2,500/$5,000 acts like an additional Idaho-only standard deduction. You probably only have a handful of Idaho filers, but I think it's an easy fix. Maybe in State Tax!H34 and State Tax!I34?
Based on the worksheet on p. 9 of https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_11-06-2023.pdf, $4489 and $8978 are the 2023 numbers. Let me know if you want better ones for 2024.
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Version 22.17 (2022/2023/2024)
Thanks once again to the Tax Foundation folks who compile 2024 State Income Tax Rates and Brackets (https://taxfoundation.org/data/all/state/state-income-tax-rates-2024/), the values in that publication are now included.
The state tax numbers are taken on faith from the Tax Foundation spreadsheet. I leave it to you residents of the various states to check for typos or describe simple calculations that would make the results more accurate. State Income Tax calculations - Crowdsourcing request (https://forum.mrmoneymustache.com/taxes/state-income-tax-calculations-crowdsourcing-request/) is the preferred place for those responses.
For those who live in states with tax codes rivaling the federal system (e.g., California et al.), well, what's in here should at least be approximately correct....
As always, comments/suggestions/bug identifications/etc. are appreciated. Either PM me or drop a note here.
2022/2023/2024 taxes version: Case Study Spreadsheet (https://docs.google.com/spreadsheets/d/19trTvaOPryFWiaup24dasbjJP6jl2SLB/edit?usp=sharing)
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Idaho only applies the 5.8% flat tax above $2500 (single) and $5,000 (MFJ). The $2,500/$5,000 acts like an additional Idaho-only standard deduction. You probably only have a handful of Idaho filers, but I think it's an easy fix. Maybe in State Tax!H34 and State Tax!I34?
Based on the worksheet on p. 9 of https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_11-06-2023.pdf, $4489 and $8978 are the 2023 numbers. Let me know if you want better ones for 2024.
Those are perfect, thanks!
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The NY CTC ('State Tax'!L54) is ~$330 ea. An approximate calculation would be
=MAX(0.33*MIN(B14*1000-MAX(ROUNDUP((B3-IF(B1=2,110000,IF(B1=3,55000,75000)))/1000,0),0)*50,Calculations!D63-Calculations!H25),B14*100)
https://www.tax.ny.gov/pit/credits/empire_state_child_credit.htm
Also, NY has a non refundable payroll PFL tax which changes each year and could be put in AG54. For 2023
=MIN(0.455%*Calculations!B3,399.43)+MIN(0.455%*Calculations!C3,399.43)
For 2024
=MIN(0.373%*Calculations!B3,333.25)+MIN(0.373%*Calculations!C3,333.25)
https://paidfamilyleave.ny.gov/cost
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The NY CTC ('State Tax'!L54) is ~$330 ea. An approximate calculation would be
=MAX(0.33*MIN(B14*1000-MAX(ROUNDUP((B3-IF(B1=2,110000,IF(B1=3,55000,75000)))/1000,0),0)*50,Calculations!D63-Calculations!H25),B14*100)
https://www.tax.ny.gov/pit/credits/empire_state_child_credit.htm
Thanks for the heads-up! Using that formula as is creates a circular reference. Instead of Calculations!D63-Calculations!H25, would Calculations!AC191 work well enough? In other words,
=MAX(0.33*MIN(B14*1000-MAX(ROUNDUP((B3-IF(B1=2,110000,IF(B1=3,55000,75000)))/1000,0),0)*50,Calculations!AC191),B14*100)
Also, NY has a non refundable payroll PFL tax which changes each year and could be put in AG54. For 2023
=MIN(0.455%*Calculations!B3,399.43)+MIN(0.455%*Calculations!C3,399.43)
For 2024
=MIN(0.373%*Calculations!B3,333.25)+MIN(0.373%*Calculations!C3,333.25)
https://paidfamilyleave.ny.gov/cost
OK, the 2024 version is there for the next release. It's not too bad allowing for multiple federal years, but in general catering to multiple state years is too much. ;)
Thanks again for the feedback!
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Woops, I missed that. Calculations!AC191 should work (I don't file Form 8812 so I made some assumptions). Actually I forgot to divide by the number of children, so the formula should be
=MAX(0.33*MIN(1000-MAX(ROUNDUP((B3-IF(B1=2,110000,IF(B1=3,55000,75000)))/1000,0),0)*50/B14,Calculations!AC191),100)
No, I don't expect you to cater to multiple state years. It will be there to remind me next year. But it would be nice if you could compare states....(https://i.imgur.com/BehvPuH.png)
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Woops, I missed that. Calculations!AC191 should work (I don't file Form 8812 so I made some assumptions). Actually I forgot to divide by the number of children, so the formula should be
=MAX(0.33*MIN(1000-MAX(ROUNDUP((B3-IF(B1=2,110000,IF(B1=3,55000,75000)))/1000,0),0)*50/B14,Calculations!AC191),100)
Added "IF(B14=0,0," at the start (and a closing parenthesis at the end) and the result is what is in there now for the next release.
No, I don't expect you to cater to multiple state years. It will be there to remind me next year. But it would be nice if you could compare states....<snip>
You can. :)
But it takes a little Excel knowledge. ;)
In the spreadsheet section below (I started at cell D243 in the upper left but you could pick any open space), the upper left cell has =G38. The rest of the first column and first row are entered by hand. To fill in the numbers, select the whole rectangular section then click Data>What-If Analysis>Data Table... and use H38 for the "Row input cell" and B3 for the "column input cell" (if you want "Earner #1 Gross Salary/Wages" to be the dollar amount).
Then select the whole rectangular section again, click "Insert" (next to "Home" in the main menu) and select the type of chart you want.
(https://lh3.googleusercontent.com/d/1HENzKk4kA7dp0Abum_Zbm5HENc3fmRuC)
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Thanks. That's basically how I got my chart. I just have to set it up again each year I want it.