Maryland’s lower standard deduction, extra local income tax rates bundled with higher real estate tax rates push it past Virginia as the highest taxes of the three for each income level we analyzed. This is mostly due to Virginia’s income tax cap at 5.75% compared to Washington DC’s highest rate of 8.5% for the bulk of his income. Chris, the highest earner of the three, finds that Virginia will provide him the most tax relief. This is thanks to its mirroring of the federal standard deduction, lower real estate taxes, no tax on groceries, and no vehicle property taxes. Washington DC yields the least amount of taxes from Bobby and Sarah, the comparably lower and middle-income earners. Virginia and Maryland property taxes vary by county and city/town, so the table below uses Arlington County rates for Virginia and the average Montgomery County rate for Maryland. They are all taking the standard deduction. Taxable income determines which income tax brackets they fall in. AGI is used to determine taxable income, as seen in the ‘Math’ chart below. Bobby, Sarah, and Chris’ AGI are all based on salary earned by the end of 2018. Chris has a vehicle valued at $65,000 and a home valued at $1,200,000.ĪGI, Adjusted Gross Income, is a term to describe a person’s income minus some specific deductions.
![virginia income tax brackets 2021 virginia income tax brackets 2021](https://specials-images.forbesimg.com/imageserve/5b9baa8fa7ea434e4c68b40a/960x0.jpg)
Sarah has a vehicle valued at $35,000 and a home valued at $800,000.Ĭhris’s AGI is $300,000. Bobby has a vehicle valued at $18,000 and a home valued at $450,000.
![virginia income tax brackets 2021 virginia income tax brackets 2021](https://federal-withholding-tables.net/wp-content/uploads/2021/07/federal-income-tax-brackets-released-for-2021-has-yours.png)
Let’s analyze the tax outlook of three different people who have just landed new jobs as employees in the DC Metro area:īobby’s AGI is $85,000. This means that if you live in one state and work in the other, you only have to worry about paying taxes and filing a tax return in the state that you live in. So with that, I will turn this week’s column over to Chris Light and the tax experts at Klausner & Company, enjoy!įirst thing’s first, Virginia, Washington DC, and Maryland all have reciprocity with each other. I am open to living in Northern Virginia, Washington DC, or Maryland and want to know which jurisdiction offers the most favorable taxation.Īnswer: Congratulations on your new job (Amazon HQ2?)! There must be a lot going on in your mind right now like whether you’re still young enough to offer your friends pizza and beer to help you move.įor years I’ve looked for a good resource to send clients in response to this question and couldn’t ever find it, so I reached out to my CPA, Klausner & Company located in Arlington VA, who I highly recommend, to come up with a detailed yet simple chart to compare taxation between Virginia, Maryland, and Washington DC across different incomes. Question: I recently got a job in the DC Metro area and will be moving to the area next year.