Massachusetts Income Tax Calculator Tax year 2023

Generally, you need to pay at least 80% of your annual income tax liability before you file your return for the year through withholding or by making estimated tax payments on any income not subject to withholding. Farmers and fishermen generally need to pay at least two-thirds (66.67%), rather than 80%. Massachusetts does not have a standard deduction, but it allows many of the same itemized deductions as the federal government, massachusetts tax calculator as well as some additional ones. Boston Harbor may be the site of the most famous tax protest in history, but today Bay Staters pay taxes on a lot more than tea. The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. While the state sales tax of 6.25% is among the nation’s highest, there are no local sales taxes levied in Massachusetts.

The Tax tables below include the tax rates, thresholds and allowances included in the Massachusetts Tax Calculator 2023. Massachusetts collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets. Unlike the Federal Income Tax, Massachusetts’ state income tax does not provide couples filing jointly with expanded income tax brackets. Starting with tax years beginning on or after January 1, 2023, individuals subject to tax under MGL ch 62 may claim a refundable, non-transferable child and family tax credit (“CFTC”) if they maintain a household as provided under IRC § 21. For the tax year beginning on or after January 1, 2023, the amount of the CFTC is equal to $310 for each such individual.

  1. See Technical Information Release (TIR) and the 4% Surtax FAQ for more information.
  2. Use a payment voucher when you are sending a paper check to DOR but your tax return has been filed electronically.
  3. Massachusetts requires most adults 18 and over with access to affordable health insurance to ob­tain it.
  4. It is renowned for its many colleges and universities, including Harvard University, the first institution of higher learning in the USA.

Select a periodic pay calculator below, continue reading to view the detailed instructions for this set of calculators or access alternate tax calculators in the Massachusetts Tax Hub. The brownfields tax credit, previously scheduled to expire on August 5, 2023, has been extended for five additional years. To qualify for a brownfields tax credit, a taxpayer must commence the environmental response action on or before August 5, 2028, and incur net response and removal costs before January 1, 2029 See TIR for more information. The rental deduction is equal to half of the rent paid for a principal residence located in Massachusetts in a taxable year. For tax years beginning on or after January 1, 2023, the maximum amount of the rental deduction is $4,000 ($2,000 if married filing a sepa­rate return). Previously, the maximum amount of the rental deduction was $3,000 ($1,500 if married filing a sepa­rate return).

State standard deduction

On this page we provide a comprehensive overview of how to use the calculator to estimate your income tax due based on your taxable income in Massachusetts in line with the 2022 Tax Tables published by the Massachusetts Government. Massachusetts offers tax deductions and credits to reduce your tax liability, including a rent and commuter deduction, as well as tax credits for income tax paid to another jurisdiction. If your employer doesn’t withhold for Massachusetts taxes, you will have to pay those taxes in a lump sum at tax time or make estimated tax payments to the state (using form Form 1-ES). Allowances provided to reduce taxable income are commonly known as “tax deductions” in the context of the United States tax system. Tax deductions lower your taxable income, and consequently, your tax liability. They are subtracted from your gross income, making the income subject to tax lower.

Massachusetts Capital Gains Tax

Property taxes, administered at the local level, are another crucial aspect of the state’s tax system. These taxes, based on the assessed value of real estate, provide funding for local services such as education, public safety, and infrastructure. You can deduct any expenses that exceed $150 (married filing jointly taxpayers can deduct expenses above $150 per person).

Income Tax Deductions for Massachusetts

You can also use our Massachusetts Salary Calculators which automatically calculate Taxable income based on standard payroll deductions. After deductions are subtracted from gross income, exemptions may also be applied based on the governing bodies taxation policy. Exemptions are certain amounts that can be subtracted from gross income based on the taxpayer’s circumstances, like dependent family members. Tax credits, which directly reduce the amount of tax owed, can also play a role in determining taxable income in Massachusetts. Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $2 million.

But if your information is the same on both your M-4 and W-4, you don’t have to fill out the former. Massachusetts has a progressive state income tax system that ranges from 5% to 9%. That goes for both earned income (wages, salary, commissions) and unearned income (interest and dividends). While the state levies a 5% tax on income up to $1 million, income over $1 million is taxed at 9%.

But it will also depend on your marital status, your pay frequency and any deductions from your earnings. One thing that doesn’t change, no matter where you live in the country, is FICA tax withholding. That’s the 6.2% for Social Security taxes and 1.45% for Medicare taxes that your employer withholds from every paycheck. Select a specific from the list below to calculate your annual gross salary and net take home pay after deductions for that tax year. For tax years beginning on or after January 1, 2023, MGL ch 62 taxpayers must pay an additional 4% (“4% surtax”) on taxable income over a certain threshold.

You should also fill one out anytime your filing status changes or you experience a big life change, like having a child. In addition to withholding federal and state taxes, part of your gross income might also have to contribute to deductions. These are known as “pre-tax deductions” and include contributions to retirement accounts and some health care costs. For example, when you look at your paycheck you might see an amount deducted for your company’s health insurance plan and for your 401k plan. Pre-tax deductions result in lower take-home, but also means less of your income is subject to tax.

To qualify for the credit, a taxpayer must be age 65 or older and must occupy the property as his or her principal residence. At the start of your new job, your employer will request that you complete a W-4 form. This crucial document assists in determining the appropriate federal income tax withheld from your paycheck. By providing details about your filing status, income, dependents, and additional income or deductions, you’ll ensure the proper amount of tax is withheld. For those seeking a deeper understanding and more detailed information on these features, including how they apply to your individual tax situation, it’s recommended to view the comprehensive instructional overview here.

We offer a variety of calculators to suit your specific needs, these include tax calculators which are based on payroll timeframes and how salary packages and wages are advertised for job vacancies in Massachusetts. All of the tax calculators on iCalculator™ US are updated with the latest Massachusetts tax tables including tax rates for the 2024 tax year. Income tax returns must be filed every spring, but income taxes are also paid all year round. This is done by authorizing employers to withhold money from employees’ paychecks to put toward income taxes. When you fill out a W-4 form, you indicate your marital status, state whether you’re exempt from income tax withholding and more. Your employer then uses that information to calculate how much to withhold from your earnings every pay period.

The Massachusetts State tax calculator is as good as the feedback, your support, requests and bug catches help to improve the accuracy of the tax calculator for all. Healthcare is another major sector in Massachusetts, with some of the leading hospitals and medical research institutions in the country located here. The state’s healthcare system is often regarded as a model for the nation. Additionally, Massachusetts has a significant financial services industry, including banking, insurance, and asset management, particularly in the Greater Boston area.

This MA State Tax Calculator balances ease of use with transparency of salary calculation but is provided for example purposes only. Remember that you should always seek professional advice and audit your MA State and Federal tax returns. Before using the calculator, it’s important to understand what constitutes taxable income. Taxable income includes earnings from employment, business profits, investments, and other income sources, after accounting, in accordance with tax legislation and laws in Massachusetts for defined allowable deductions and exemptions. Taxable income is the portion of an individual’s or corporation’s income used to calculate how much tax they owe to the government in a specific tax period. It includes wages, salaries, bonuses, capital gains, and income from other sources such as investments or rental properties.

What is FICA, and why is it on my paycheck?

However, several components will reduce this amount, resulting in your net pay. Let’s delve into these aspects and discover where your hard-earned money goes. A single filer in Massachusetts will bring home $58,932.50 with an income tax of $19,067.50.

Some deductions are “post-tax”, like Roth 401(k), and are deducted after being taxed. One of the key features of Massachusetts’ tax system is its approach to personal income tax. The state has a flat income tax rate, where all taxpayers, regardless of income level, pay the same percentage of their income in state taxes. This simplifies the tax calculation process for residents, though they still need to adhere to the complexities of the federal tax system, which uses a progressive rate structure. Most long-term capital gains, as well as interest and dividend income, are taxed at the standard income tax rate of 5.00%. Capital gains in those categories are included as taxable income on the Massachusetts income tax return.

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