Overview of Massachusetts Taxes
Massachusetts has a flat income tax rate, as well as a flat statewide sales tax rate. The state’s income tax rate is second highest out of the eight states that levy a flat rate.
Number of Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|2018 Trump Taxes*|
|Total Income Taxes|
|Income After Taxes|
* These will be the taxes owed for the 2018 - 2019 filing season.
Under the Trump Tax Plan (2018-2019 filing season), your Federal Income Tax will be and your FICA will be .
Changes to Your Federal Income
Taxes Under the Trump Tax Plan
- Your marginal federal income tax rate will
- Your effective federal income tax rate will
- Your federal income taxes will
Total Estimated Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
- 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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Massachusetts state tax quick facts
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 of 5.10% is higher than all but one of the other eight states that levies a flat income tax. The statewide sales tax rate of 6.25% is among the 20 lowest in the country (when including the local taxes collected in many other states).
Other taxes collected in Massachusetts include a gas tax, a capital gains tax, local property taxes and an estate tax. Below, we’ll take a deeper look at the rules and rates for each of these taxes.
Massachusetts Income Tax
The income tax rate in Massachusetts is 5.10%. That rate applies equally to all taxable income. Unlike with the federal income tax, there are no tax brackets in Massachusetts. While that makes life a little simpler, it does not necessarily mean Massachusetts taxpayers have smaller tax bills: according to the Tax Foundation, the state’s income tax collections per person were $1,919 in 2016, 4th highest in the country. State residents also have the option to pay a higher income tax rate of 5.85%.
Massachusetts does not have a standard deduction, but 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 $3,000) and student loan interest payments. If you are looking to get help filing your return, you can look into the best tax software.
In addition to those deductions, taxpayers can claim a personal exemption to lower their taxable income. The table below shows the Massachusetts personal exemption for the 2016 tax year.
Massachusetts Personal Exemption Amounts
|Filing Status||Personal Exemption|
|Head of Household||$6,800|
|Married filing Separate||$4,400|
|Married filing Joint||$8,800|
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 $100 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 5.10%. 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 12%, 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% of 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 are one of the most significant sources of revenue for local governments in Massachusetts. In some counties, average property taxes paid exceed $4,000 per year. Effective property tax rates (taxes paid as a percentage of market value) range from less than 0.4% up to 1.6%, and the state average effective rate is 1.20%. That’s the 18th highest rate 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.
Calculate Your Property Taxes: Massachusetts Property Tax Calculator
Massachusetts Estate Tax
Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $1 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. However, estate tax is only due if the taxable estate (after deductions) exceeds $1 million.
Massachusetts Estate Tax Rates
|Taxable Estate||Marginal Rate|
|$0 - $40,000||0.00%|
|$40,000 - $90,000||0.80%|
|$90,000 - $140,000||1.60%|
|$140,000 - $240,000||2.41%|
|$240,000 - $440,000||3.20%|
|$440,000 - $640,000||4.00%|
|$640,000 - $840,000||4.80%|
|$840,000 - $1,040,000||5.60%|
|$1,040,000 - $1,540,000||6.40%|
|$1,540,000 - $2,040,000||7.20%|
|$2,040,000 - $2,540,000||8.00%|
|$2,540,000 - $3,040,000||8.80%|
|$3,040,000 - $3,540,000||9.60%|
|$3,540,000 - $4,040,000||10.40%|
|$4,040,000 - $5,040,000||11.20%|
|$5,040,000 - $6,040,000||12.00%|
|$6,040,000 - $7,040,000||12.80%|
|$7,040,000 - $8,040,000||13.60%|
|$8,040,000 - $9,040,000||14.40%|
|$9,040,000 - $10,040,000||15.20%|
Massachusetts Cigarette Tax
Massachusetts has one of the highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the price of cigarettes in Massachusetts at about $10.00 per pack.
Massachusetts Alcohol Tax
On the other hand, Massachusetts’s taxes on alcohol are some of the lightest in the U.S. According to the Tax Foundation, those taxes total 11 cents per gallon of beer. This is the 7th lowest in the country.
Massachusetts Gas Tax
Gasoline taxes total 26.54 cents per gallon. That includes taxes and fees.
Photo credit: flickr
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
Where you live can have a big impact on both which types of taxes you have to pay each year and how much money you spend on them. SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country and ranked the lowest to highest tax burden.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.
For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to rank the counties to calculate a total tax burden.
Sources: US Census Bureau 2014 American Community Survey, Government Sources, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration, SmartAsset