Overview of Massachusetts Taxes
Massachusetts has a flat income tax rate of 5%, but charges a 4% surtax on income over $1 million. The state also has a flat statewide sales tax rate of 6.25%. The state’s income tax rate is only one of a handful of states that levy a flat rate.
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Your Income Taxes Breakdown
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* These are the taxes owed for the 2023 - 2024 filing season.
Your 2023 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2023 Tax BurdenIncome Tax $ Sales Tax $ Fuel Tax $ Property Tax$ Total Estimated Tax Burden $ Percent of income to taxes = % | $ |
- About This Answer
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2024
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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Taxes in Massachusetts
Massachusetts State Tax Quick Facts
- State income tax: 5.00% flat rate, 4% surtax on income over $1 million
- Sales tax: 6.25%
- Property tax: 1.20% effective rate
- Gas tax: 24 cents per gallon of regular gasoline and diesel
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. The Massachusetts income tax rate is 5.00%. While the state sales tax of 6.25% is among the nation's highest, there are no local sales taxes levied in Massachusetts.
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Massachusetts Income Taxes
The income tax rate in Massachusetts is 5.00%. That rate applies equally to all taxable income up to $1 million. As mentioned above, incomes that exceed this threshold are subject to a 4% surtax that was first instituted in 2023. State residents who would like to contribute more to the state’s coffers also have the option to pay a higher income tax rate. Few taxpayers choose to do so.
Massachusetts does not have a standard deduction, but it allows many of the same itemized deductions as the federal government, as well as some additional ones. For example, taxpayers can make deductions for child care expenses, college tuition (if it exceeds 25% of Massachusetts adjusted gross income), certain commuter costs, rental payments (50% of rent up to $4,000) and student loan interest payments.
In addition to those deductions, taxpayers can claim a personal exemption to lower their taxable income.
Residents of Massachusetts are also subject to a penalty if they do not have health insurance coverage, which is paid through their tax return. There is a three-month grace period for health coverage lapses, after which the penalty accumulates on a monthly basis, up to about $183 per month. The total penalty depends on income.
Massachusetts Capital Gains Tax
Capital gains in Massachusetts are taxed at one of two rates. 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. Short-term capital gains, which are realized in less than a year, are taxed at a rate of 8.5%, as are long-term gains on the sales of collectibles.
Massachusetts Sales Tax
The state sales tax rate in Massachusetts is 6.25%. There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state. The tax is on the purchase or use of “tangible personal property.” This includes nearly any purchasable good, with some exceptions.
Most food sold in grocery stores is exempt from sales tax entirely. Clothing purchases, including shoes, jackets and even costumes, are exempt up to $175. A product that costs more than $175 is taxable above that amount, so a $200 pair of shoes would be taxed at 6.25% on the $25 above the exemption limit. Other exempt items include newspapers, admissions tickets (i.e. to movies or sporting events), professional or personal services and most health care products.
Massachusetts Property Tax
Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, median property taxes paid exceed $6,000 per year. The median property tax bill in the state is $5,091 – one of the highest in the country.
If you are planning on refinancing or getting a home loan in Massachusetts, take a look at our Massachusetts mortgage rates guide.
Massachusetts Estate Tax
Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $2 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. Estate tax rates range from 0.8% to 16%.
Massachusetts Cigarette Tax
Massachusetts has some of the highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the average price of cigarettes in Massachusetts at around $9 per pack.
Massachusetts Alcohol Tax
Massachusetts taxes alcohol at varying rates: 11 cents per gallon of beer, 55 cents per gallon of wine and $4.05 per gallon of liquor.
Massachusetts Gas Tax
Gasoline and diesel taxes in Massachusetts each total 24 cents per gallon.
- Plymouth, Massachusetts was founded by pilgrims who were aboard the ship the Mayflower in 1620.
- While Massachusetts is the seventh smallest state in the U.S. by area, it is the 16th largest state by population.
- Harvard University, founded in Boston in 1636, is the oldest institution of higher education in the U.S.
