Overview of Nevada Taxes
Nevada is one of seven states that does not have a state income tax, although residents do have to pay federal taxes. No cities in Nevada have local income taxes.
This calculator reflects the 2018 federal withholding tax changes.
Click here to learn more about how the Trump Tax Plan will affect you.
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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 Quick Facts
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 where it is counted toward your annual income taxes. How much you pay in federal income taxes depends on factors including your marital status, how many allowances you are eligible for and how many you claim, how much your annual salary is and if you choose to have additional tax withheld from your paycheck.
Under federal tax law, married people filing jointly are taxed differently than single filers. Your employer determines how much to withhold from each of your paychecks based on the information you indicate on your W-4 form. You will 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.
It’s worth noting that withholding calculations for federal income tax have changed for the 2018 tax year. The IRS released new guidelines in January to reflect changes that came with President Trump’s new tax plan. Taxpayers should have seen changes to their paychecks, to reflect the new tax plan, starting in February 2018. For the time being, you do not need to fill out a new W-4. Your employer will use the withholding information on your current form.
How many allowances you are eligible for is also partially based on your marital status. Whether or not you have children affects your allowances, too. The more allowances you claim equals less tax withholding and a bigger paycheck. But be careful about claiming allowances that you do not actually qualify for. If you do, you run the risk of underpaying your taxes all year and being slammed with a big tax bill in April.
It’s also worth noting you can’t claim the same allowances for more than one job. If you have more than one job, you must either divide your allowances up between your jobs, or you can take all your allowances at one and none at the others. If you take more than one allowance at the same job, you’re going to have to pay more in taxes during tax season.
FICA taxes are Social Security tax and Medicare tax. Your employer will withhold 6.2% in 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 in excess of $200,000 are subject to a 0.9% Medicare surtax, which employers do not match.
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, that money will be deducted from your pay before it hits your bank account.
Nevada Median Household Income
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If you move to Nevada from a high income tax state like California or Minnesota, you may be pretty excited when you receive your first paycheck and see that there is no state income tax being withheld. No Nevada cities levy local income taxes, so you don’t have to worry about that either.
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.
All that said, the state has to get money somewhere and the way in which Nevada makes up for the lack of income tax and below average property taxes is mainly through sales tax. Statewide sales tax in Nevada is 6.85%, which is the eighth highest in the country. There are also local sales taxes in Nevada counties and cities. So while you can keep more of your Nevada salary, sales taxes do affect your budget.
When it comes to owning a home, 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 your home or purchase one in the Silver State, make sure to look at our Nevada mortgage guide.
How You Can Affect Your Nevada Paycheck
As we’ve established, Nevada has no state or local income taxes, however residents do still have to think about federal taxes. 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, so it lowers your taxable income.
For the same reason, you can consider making use of a Health Savings Account or Flexible Spending Account, if your employer offers them. Just keep in mind that HSAs and FSAs do not roll over from year to year, so any money you put in here you need to use or you will lose 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 2016 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics