Overview of Massachusetts Taxes
Massachusetts has a flat income tax rate of 5.00%, as well as 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
| Tax Type | Marginal Tax Rate | Effective Tax Rate | 2020 Taxes* |
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* These are the taxes owed for the 2020 - 2021 filing season.
Your 2020 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2020 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. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan.
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, 2020
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.
- 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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Taxes in Massachusetts
Massachusetts State Tax Quick Facts
- State income tax: 5.00% flat rate
- Sales tax: 6.25%
- Property tax: 1.17% average 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%. 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).
A financial advisor in Massachusetts 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.
Massachusetts Income Taxes
The income tax rate in Massachusetts is 5.00%. That rate applies equally to all taxable income. Unlike with the federal income tax, there are no tax brackets in Massachusetts. 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 $3,000) 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 $119 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 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% 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, average property taxes paid exceed $4,000 per year. The state's average effective property tax rate (taxes paid as a percentage of market value) is 1.17%.
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 $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 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 final price of cigarettes in Massachusetts at around $10.00 per pack.
Massachusetts Alcohol Tax
On the other hand, Massachusetts’ taxes on alcohol are some of the lightest in the U.S. These taxes are 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 15th largest state by population.
- Harvard University, founded in Boston in 1636, is the oldest institution of higher education in the U.S.
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.
Methodology
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
