State tax income tax information for 2018 is available now. If you plan with TOTAL, Money Tree’s in-depth financial planning software, it’s standard practice to ensure the state tax rates are entered for all of the states your clients reside in and the rates are up-to-date each year. The Tax Foundation is an excellent state tax resource providing updated rates each year, which is used to populate the state tax rates in TOTAL. A new option will be available in TOTAL’s desktop edition to download the state tax data, which means this time-saving feature will be available for both the desktop and online edition.
To get the latest state tax data, use the [Reset All State Tax Settings] option under Settings, State Tax. This option resets the state tax information to the latest state tax rates provided by Money Tree Software, which have been updated for 2018. This option can be used anytime, allowing you to update the state tax information on your own timeline.
Desktop Edition – NEW:
A new feature included in the 2018 tax update, which will be available this week, allows the desktop edition download the latest state tax rates, anytime. This feature has been highly requested and we are happy to have the state tax rates available for all states for both the online and desktop edition. Get the latest state tax rates in the desktop edition by going to Settings/Defaults under the Tool menu. An internet connection is required to use this feature.
If you prefer to update state tax rates manually, or would like to review the information before updating, the 2018 state tax data entered in TOTAL Online is included in this post.
State Tax Foundation Resource:
State Individual Income Tax Rates and Brackets for 2018
AL | AK | AZ | AR | CA | CO | CT | DE | FL | GA | HI | ID | IL | IN | IA | KS | KY | LA | ME | MD | MA | MI | MN | MS | MO | MT | NE | NV | NH | NJ | NM | NY | NC | ND | OH | OK | OR | PA | RI | SC | SD | TN | TX | UT | VT | VA | WA | WV | WI | WY | DC
The eleven states listed below had tax changes in 2018.
Several states have deductions or exemptions tied to the federal tax system, which will impact state taxes.
At the time of the 2018 state tax update, the 2017 tax rates were used for the following states as the 2018 rates were not available.
Arkansas, California, Idaho, and Ohio had not released the state tax rates at the time of last year’s state tax update. The rates for these states have been updated from 2016 to the 2017 rules.
The Tax Foundation’s article features a helpful graphic highlighting the top marginal tax rate per state. The states with the highest marginal state tax rate are shaded in blue. California remains the highest top marginal tax rate of 13.3%, followed by Hawaii’s 11% (with a reinstatement of three tax brackets for the highest-income taxpayers), and Oregon still holding the number three stop with a top rate of 9.9%. Maine, which held the number two spot last year, dropped off the top three due to a repeal of the 3% surcharge on earnings over $200,000.
Screenshots of the state tax rates as entered in TOTAL Online are available below. The tax settings have been entered in a conservative manner.
NOTE: Many states offer standard deductions near or equal to the amount of the federal deductions, but do not allow all federal itemized deduction items. For those states, the state tax rates are set to apply to AGI, leaning towards conservative assumptions. Choosing to apply state tax rates to federal taxable income would include all federally allowed itemized deductions (or federal standard deduction if not itemizing) for the state tax calculations.
The option to exclude retirement account withdrawals is not selected for any states that offer partial exemptions of retirement income.
For states only taxing interest and dividend income (New Hampshire and Tennessee) the tax rate is applied to all income except of Social Security and Retirement Account Withdrawals given the availability of those options.
Remember, adjustments can be made per plan. An option to exclude pension plans taxes on either the federal or state level is available on Pension plan data. Additional adjustments can be made using Tax Details plan data to adjust the client’s state taxable income or tax amount.
Jump to State:
AL | AK | AZ | AR | CA | CO | CT | DE | FL | GA | HI | ID | IL | IN | IA | KS | KY | LA | ME | MD | MA | MI | MN | MS | MO | MT | NE | NV | NH | NJ | NM | NY | NC | ND | OH | OK | OR | PA | RI | SC | SD | TN | TX | UT | VT | VA | WA | WV | WI | WY | D.C.
The top rate includes 1% mental health service tax surcharge.