Overview of Nevada Taxes
Nevada is one of a handful of states that does not have a state income tax. In addition, no cities in Nevada have local income taxes. However, residents still have to pay federal taxes.
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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.
Nevada Paycheck Calculator
Nevada Paycheck Quick Facts
- Nevada income tax rate: 0%
- Median household income: $63,276 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your Nevada Paycheck Works
Nevada may not charge any state income taxes, but residents still have to pay federal income taxes and FICA taxes. Your Nevada employer will withhold federal income taxes from each of your paychecks and send that money to the IRS, which counts it toward your annual income taxes. How much you pay in federal income taxes depends on factors including your marital status, how much your annual salary is and if you choose to have additional tax withheld from your paycheck.
Your employer determines how much to withhold from your paychecks using the information you indicate on your Form W-4. You have to fill out a new form every time you start a job or if you want to make changes to your withholding at any time. You should look to change your withholding information whenever you experience big life changes, such as getting married or having a child.
It’s worth noting that withholding calculations for the federal income tax changed for the 2018 tax year because of President Trump’s new tax plan. In addition to this, the IRS has made notable revisions to the W-4. The new form no longer asks you to list total allowances, but it requires filers to instead enter annual dollar amounts for income tax credits, non-wage income, total annual taxable wages and itemized and other deductions. The form also has a five-step process which allows filers to enter personal information, claim dependents and enter any additional income or jobs. This new W-4 and its changes mainly apply to those shifting jobs or adjusting their withholdings in 2020 or later.
FICA taxes consist of Social Security tax and Medicare tax. Your employer will withhold 6.2% of your taxable income for Social Security tax from each of your paychecks and 1.45% in Medicare tax. Your employer matches these amounts, so the total contribution is double that. Any earnings you have in excess of $200,000 are subject to a 0.9% Medicare surtax, which employers do not match. If you are self-employed, you have to pay the full taxes, including the employee and employer portions, on your own.
You can also elect to have additional withholdings taken out of your paycheck. If you are enrolled in an employer-provided health insurance plan, any premiums you pay will come from your salary. Similarly if you choose to invest in a 401(k) or 403(b) retirement plan, your contributions are deducted from your pay. These contributions are also pre-tax, which means they come out of your pay before taxes are applied. So putting money in one of these accounts will lower your taxable income.
A financial advisor in Nevada 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.
Nevada Median Household Income
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As is mentioned above, Nevada does not have a state income tax and no cities in the state levy local income taxes. Property taxes are also not a major source of financial concern for most Nevadans. The average homeowner in the state pays annual property taxes that are equal to 0.53% of their home's market value, so annual property taxes shouldn't take a significant chunk out of your bank account. Nevada largely earns money from its sales tax, which can be one of the highest in the nation and varies from 6.85% to 8.375%.
Low property taxes and the absence of any state or local income taxes in Nevada can make it a particularly affordable place to own a home. If you’re looking to refinance a mortgage or purchase a home in the Silver State, make sure to look at our Nevada mortgage guide.
How You Can Affect Your Nevada Paycheck
One option that Nevadans have to shelter more of their paycheck from Uncle Sam is to put more money into pre-tax retirement accounts, such as a 401(k) or 403(b). The money that you put into these accounts is taken out of your paycheck before taxes are applied, helping you to lower your taxable income, which leads to tax savings.
For the same reason, you can consider making use of a health savings account (HSA) or flexible spending account (FSA), if your employer offers them. Just keep in mind that FSAs only allow $500 to roll over form year to year. So if you do not use the money you put in, you chance losing it.
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the U.S. Zoom between states and the national map to see data points for each region, or look specifically at one of the four ranking factors in our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology To find the most paycheck friendly places for counties across the country, we considered four 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, or greatest take-home pay.
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 index that shows the counties with the lowest rate of unemployment. For income growth, we calculated the annual growth in median income throughout a five year period for each county and then 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.