Overview of Nevada Taxes
Nevada is one of seven states that does not have a state income tax, and no cities in Nevada have local income taxes. However, residents do 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.
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Nevada Paycheck Calculator
Nevada Paycheck Quick Facts
- Nevada income tax rate: 0%
- Median household income: $55,434 (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 many allowances you claim, 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 W-4 form. 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 federal income tax changed for the 2018 tax year because of President Trump’s new tax plan. You should have already seen those changes in your paychecks, but it’s a good idea to verify that the number of allowances you’re claiming on your W-4 is still correct.
The number of allowances you are eligible to claim is based on multiple factors, like your marital status and whether or not you have dependents. In general, the more allowances you claim, the less your employer will withhold from your paycheck. This allows you to tweak your paycheck size, but be careful about claiming allowances that you do not actually qualify for. If you claim too many allowances, you run the risk of underpaying your taxes all year and getting a big tax bill in April.
It’s also worth noting that you can’t claim the same allowances for more than one job. So if you have more than one job, you must either divide your allowances between your jobs or take all your allowances at one and none at the others. If you claim the same allowances at multiple jobs, you’ll underpay on your taxes and find yourself with a bill come tax time.
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 mentioned, Nevada does not have a state income tax. No Nevada cities 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 0.77% 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 is the eighth highest in the nation at 6.85%.
The low property taxes and absence of any state or local 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 like 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 save on taxes.
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 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