Mn taxes music tutor4/8/2023 ![]() “Clothing accessories,” however, like hair clips, umbrellas and backpacks, are taxable. ![]() Blue jeans, shoes, coats, t-shirts and even diapers are all nontaxable. On the other hand, candy, soft drinks and food from vending machines are all taxable.Īdditionally, most clothing is not taxable in Minnesota, an important exception that separates Minnesota from many other states. So, for example, you would pay no sales tax on cereal, spaghetti sauce, sugar or food coloring. While those taxes apply to prepared food (as does the regular state sales tax), food purchased at a grocery store, for off-premises consumption, is generally not taxable in Minnesota. Two other cities, Mankato and Proctor, have their own surtaxes on food and beverages, of 0.5% and 1% respectively. In Minneapolis, there are surtaxes of 3% on restaurants, liquor and entertainment in the downtown area. The table below shows the sales tax rates for every county and the largest cities in Minnesota.Īs you can see, in several of Minnesota’s largest cities, sales taxes (local plus state) exceed 7.50%. Additionally, many counties and cities in Minnesota levy their own local sales taxes, with rates of up to 2.00%. The state sales tax rate in Minnesota is 6.875%. The three most significant tax credits are the Working Family Credit (available to taxpayers who are eligible for the federal Earned Income Tax Credit), the Dependent Care Credit and the K-12 Education Credit (which allows taxpayers with children in school to deduct expenses). There are a number of tax credits which can lower your overall tax bill in Minnesota. Most states do not tax Social Security benefits at all. One rule that may be important to many retirees is that Minnesota taxes Social Security benefits at the same level as the federal government (which is up to 85% of Social Security benefits). For all other filers, the phase out begins at $199,850 of federal AGI. For married persons filing separately, the phase out begins at $99,925 of federal adjusted gross income (AGI). Itemized deductions in Minnesota phase out for taxpayers above a certain income level. Heads of household get a standard deduction of $18,800. For married couples, the standard deduction is $25,800 total if filing jointly and $12,525 (each) if filing separately. The Minnesota standard deduction for 2022 is $12,900 for single filers. ![]() With the exception of the deduction for state and local income taxes, all federal itemized deductions can also be claimed on Minnesota state income tax returns. Taxable income takes into account all applicable deductions and exemptions in Minnesota, these track very closely to federal deductions and exemptions. But these rates apply to taxable income, not gross income. The Minnesota state income tax is based on four tax brackets, with higher marginal rates for higher income earners.Īs mentioned above, those are among the highest state income tax rates in the country. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. However, the impact of those rates will vary greatly depending on a taxpayer’s income level, home value and spending habits.Ī financial advisor can help you understand how these taxes fit into your overall financial goals. ![]() The state’s property taxes and sales taxes are likewise above average on a nationwide scale. State income tax rates in the “Land of 10,000 Lakes” are among the highest in the nation, ranging from 5.35% to 9.85%, some of the highest rates in the country. ![]()
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