Tax Question

[sassy1234]

Hi, I am trying to calculate the tax difference between living and working in either Illinois or ohio.   I am not well versed on how to do so, so I thought I would ask the smart MMMers. 

A bit about me. 

Married, 1 child, combined income of 165,000.  We are currently considering moving to ohio. Our salaries would be the same no matter where we lived.   

I know Illinois has very high property taxes.  I was having a hard time understanding income, sales tax comparisons, etc.   

Thanks for you help! 

[MDM]

You could start with http://taxfoundation.org/article/state-individual-income-tax-rates to compare state income taxes.

Then check whether there are local (e.g., city) taxes.

If you have Quicken, etc. you can look at historical spending and estimate what you do and would pay in sales tax (google "state sales taxes" or similar - also check local (e.g., city) sales taxes).

Same as above for property taxes - you'll also need an idea of the home price you will pay.

In any case...good luck!

[Garnacerous]

Any particular town in Illinois you were thinking of moving? You're correct, the area around Chicago can have some pretty high taxes. But on the other hand, the Illinois side of the St Louis area has some of the lowest costs of living anywhere. Sure East St Louis has its reputation, but most of the other towns like Belleville, Fairview Heights, and Collinsville are perfectly normal suburbs.

[Trirod]

Note that Ohio also has high property taxes.  Mine run at about 3% of the value of my house annually, although that varies with where exactly you are in Ohio.

One thing you might not realize is that Ohio has a municipal income tax, which can be as high as 2.25%.  The effective rate can be as high as 3% (or even higher with school district income taxes), if you live in one taxing city and work in another (double taxation!).  So what city you live and work in will have a significant bearing - or with luck you can both live and work outside taxing municipalities.

Sales tax varies by county, but it is 7% here in Lucas county which is about average.

State income taxes are graduated, unlike Illinois which is a flat 5%.  The highest rate in Ohio is 5.333% but you have to hit $200,000 to  pay that.  It's likely that your state income taxes will be lower in Ohio than Illinois, but the municipal income taxes could eliminate those savings very easily.

[sassy1234]

Just to clarify, I might be moving from Chicago (western suburbs) to Cincinnati or the surrounding suburbs.