Overview of Idaho Taxes
Idaho has seven income tax brackets, ranging from 1.125% to 6.925%. The good news is that Idahoans don’t have to worry about local taxes, as there are none in the state.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Idaho Paycheck Calculator
Idaho Paycheck Quick Facts
- Idaho income tax rate: 1.125% - 6.925%
- Median household income: $53,089 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your Idaho Paycheck Works
If you are employed, you’re going to get taxes withheld from each paycheck. Whoever you work for will withhold FICA taxes and federal income taxes from your pay. FICA taxes include Medicare and Social Security taxes, which are taxed at a rate of 1.45% and 6.2% respectively. Your employer then matches these contributions so that the total amount is double those percentages. Additionally, if you make wages in excess of $200,000, the excess is taxed an additional 0.9% for Medicare, which employers do not match. Federal income tax also goes to the IRS where it is counted toward your annual income taxes.
How much money your employer withholds from your paychecks depends on the information you provide on your W-4 form. This form is one you’ll need to fill out whenever you get a new job or you have a life change, like having a baby. You can also fill out a new W-4 if you just need to make changes to your withholding amount during the year.
In December 2017, President Trump signed a new tax plan into law. Because the plan changed withholding calculations, your paycheck size may have changed slightly from 2017 to 2018. Even though this was a couple of years ago, it’s a good idea to look over your W-4 again just to make sure all of the information is still correct.
Additionally, the 2020 version of the Form W-4 comes with new guidelines from the IRS. More specifically, it no longer utilizes total allowances, though it requires filers to enter annual dollar amounts for things like income tax credits, non-wage income, itemized and other deductions and total annual taxable wages. It also features a five-step process that asks filers to enter personal information, claim dependents and indicate any additional jobs or income.
For the most part, these changes affect only those making adjustments to their withholdings or changing jobs in 2020. Employees hired before 2020 aren’t required to complete the new W-4. The tax return you file in April 2021 will contain any adjustments you’ve made to your withholdings in 2020.
Several factors affect how much taxes get taken out of your pay. For one, your marital status (and whether you indicated on your W-4 that you’re filing jointly or separately) will have an impact on your tax bill. Dependents may also affect your paycheck each month. Keep in mind though, if you underpay your taxes all year, you might be looking at a bigger tax bill come April.
Your paycheck size will also be affected by your pay frequency. If you get paid biweekly, your paychecks will be smaller than if you get paid once per month.
Anyone filing in the Gem State as single or married, filing separately, will be taxed 1.125% on the first $1,541 of taxable income. Furthermore, they'll be taxed at 3.125% on income over $1,541; at 3.625% on income over $3,081; at 4.625% on income over $4,622; at 5.625% on income over $6,162; at 6.625% on income over $7,703; and at 6.925% on all income over $11,554, which is the highest tax bracket in Idaho.
If you’re married and filing jointly or as head of a household, your tax rates are the same, but the income brackets are doubled. No cities in Idaho levy local income taxes.
A financial advisor in Idaho can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
How You Can Affect Your Idaho Paycheck
Idaho residents can do a few things to change the size of their paychecks. Of course, you can ask for a raise or take on additional hours if you qualify for overtime. If that isn’t an option, though, you can also opt to withhold a specific dollar amount from each of your paychecks. Let’s say you want $25 taken out of every paycheck. All you have to do is write $25 on the appropriate line when you fill out a new W-4.
How much you withhold form your paycheck comes down to personal preference a bit. Some people would prefer to have their money throughout the year so they can invest it or at least put it in a high-interest savings account. Others like the idea of getting a big refund.
Another options for changing you paycheck size is contributing to certain benefit accounts that your employer may offer. Contributing to a flexible spending account (FSA), health savings account (HSA) or a pre-tax commuter program are all ways to lower your taxable income.
You can also shelter your money from taxes in a 401(k) or 403(b) retirement account, where it will grow tax-free. These accounts all use pre-tax money, which means that money goes into these accounts before taxes are removed. By removing this money pre-tax, you decrease how much of your paycheck is subject to taxes. In some cases, this might even push you into a lower tax bracket. In particular, if you can afford it, think about making even a small contribution to a pre-tax retirement account. You’ll help yourself save for the future while also lowering your taxable income now.
Whether it’s the potatoes or the absence of local income taxes that’s bringing you to Idaho, take a look at our Idaho mortgage guide before making the move to learn all about mortgage rates and how to get a mortgage in Idaho.
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that shows the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2017 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics
