Looking to understand how “no income tax” works.... say move to Texas, my salary is 100,000, I get paid 2x a month. Does that mean my paycheck is 100,000/24 - any costs of 401K, healthcare? Sounds too good to be true.....

funnylike
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No *state* income tax. You still pay federal income tax, which is the vast majority of it.

Also, TX makes up for it with high property taxes.

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I live in Illinois in the north suburbs and pay 15k a year in property taxes!

I have no words

likefunny

🤦‍♂️

likehelpful

Saving around 4-5% in state taxes. That is all. And you pay it all back in form of high real estate tax, Less govt benefits, and a crap load of Ted Cruz nonsense

like

I’m fine with fewer government services since I have to deal with every Illinois politician corruption and nonsense.

The grass is greener.

like

No state* income tax and 52/2 = 26

like

Some companies like KPMG pay twice monthly (24 pay periods) vs every two weeks (26 pay periods).

like

As a counterpoint to everyone above, you can also just not pay your Federal taxes. Is it illegal? Yes. But will you go to jail? Also yes.

funnylikesmart

So, it is a criminal offense to not FILE your taxes - it is a civil offense to not pay them. If you file your taxes correctly every year and just don’t pay them, you won’t go to jail, but the federal government will try get their money.

helpful

Speechless as D4. How did you get by in life until now, OP? 😨

like

Did that happen in friends? I honestly had no idea

No STATE income tax, still pay Uncle Sam. So if you live in CA today and move to TX with the same salary you get an instant 6-13% raise

like

There is no state income tax. That does not mean no federal or FICA taxes

like

You still pay Federal Taxes, Social Security, etc. Just no state income tax

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Thanks everyone!!!! I feel so dumb!!!! Love yall !!!

like

Good on you for taking this one on the chin

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The thing is…you have to actually live in Texas then…

like

Yeah but that weather…ooof

Which states or territories have no federal income tax?

likehelpful

There are some other countries without income tax (UAE, Monaco come to mind) but US citizens always will have to pay federal tax (with an exclusion up to a certain income amount).

like

You still pay federal income tax, social security etc - you just dont pay state or city taxes. (Often ~5-10%).

Just use any „take home pay calculator“

helpful

You still have to pay federal income tax. Some states don’t have state income tax.

No income tax means you only pay federal taxes. As a trade off, property tax and / or sales tax are significantly higher to offset.

Just look at your paystub from an old job, and add back in the line item for “state tax.”
All other deductions such as federal, fica, social sec still stand.

State income tax is fairly small comparing to all the other taxes you are paying... If that's the sole reason you are moving g to Texas, I'd reconsider..

Federal withholding, Social security (6.2%), Medicare (1.45%), on top of any deductions for healthcare premium, 401k, HSA , FSA, ESPP, etc.

I have to pay NY City and State taxes.

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