The worst feeling is looking at your paycheck and seeing how much tax money is taken out from your gross income. Paying taxes, such as property tax and sales tax, are mostly inevitable.
However, what if you could live in a city where you can pay less tax and end up saving some good money? According to TurboTax, there are ways you can do this. Check out this list of the cities with the lowest taxes to see if you can move and dodge those high costs.
10. Las Vegas, Nevada
Although Las Vegas is known to be filled with luxurious and high-end casinos, hotels and restaurants, you'd be surprised to know that its residents do not get charged income tax. The residents of Las Vegas also benefit from lower property tax rates, and they are able to take out state and local sales tax payments. In this state, the sales tax rate is 7.75 percent, but people only pay that amount of tax on about 37 percent of the items they buy.
9. Manchester, New Hampshire
This city actually has a high property tax, making it the primary tax that is collected. However, because Manchester does not have any other type of taxes. If you live in this city, you are not responsible for any sales or income taxes whatsoever. This greatly balances out cost-wise, resulting in Manchester considered being a low-tax city.
8. Sioux Falls, South Dakota
South Dakota is another state with no state taxes and has a lower tax level in general. Sioux Falls specifically has no city taxes but does have sales taxes. Despite this city having a higher sales tax of 6.5 percent, it does not collect any income tax, and the auto tax is very low. Even if your yearly income is over $100,000, you can still have a low state and local tax rate.
7. Memphis, Tennessee
The city of Memphis is on the growing list of cities void of city and state income taxes. The state itself does impose income tax on dividend or interest income, but your hard-earned money from work says tax-free. However, it is important to note that in Memphis, residents with a lower income have a tax rate of about 11 percent which is greater than residents with a higher income with a tax rate of about 4.5 percent. This is because the principle tax in Memphis is sales tax at a whopping 9.25 percent.
6. Billings, Montana
As we know, most cities require income tax. However, residents of Billings, Montana can take advantage of having the lowest income tax out of all the other cities. As a resident, the responsibility of paying sales tax to the city or the state is also lifted off your shoulders. On average, taxes are pretty low at 7.4 percent.
5. Jacksonville, Florida
If you stay in Jacksonville, you can also enjoy living an income tax-free life. As a resident, you will not have to pay any income tax within this city. Similar to Sioux Falls, even if your income is above $100,000, you still qualify for a low overall state and local tax rate of just 4.3 percent. Florida as a state generates its revenue from sales taxes which is 6 percent.
4. Fargo, North Dakota
Fargo as a city has a tax rate of about 5.2 percent. This city collects its tax revenue primarily from auto, property and sales tax. North Dakota does not have any state or local income tax. In fact, Fargo is involved in many oil and gas productions and businesses which also helps generate its income. This is good news for Fargo residents, because this means that their city does not completely rely on residents for money.
3. Houston, Texas
Houston has an overall low tax rate for its residents. Although they have a high sales and property tax rate, it offsets with the lack of state and local income taxes. Houston is one of the few cities that allows a tax rate that is less than 5 percent -- if you are a family of three with an annual income over $150,000.
2. Anchorage, Alaska
Anchorage seems to be the paradise city of low taxes. The residents of Anchorage have high incomes in general and still aren't responsible for a heavy tax burden. They also do not have to pay any sales tax and enjoy an income tax-free city and state. Furthermore, Anchorage's auto taxes are one of the lowest out there. If you live in Anchorage, you are only responsible for a 3.4 percent tax burden.
1. Cheyenne, Wyoming
Last but not least, Cheyenne, Wyoming is the number one city in the United States with the lowest taxes. Residents do not owe any state income tax, tax on out of state retirement income, excise tax or intangible tax. Families of lower income have an average tax rate of 9.7 percent. Families of higher income have a much greater advantage, paying a low 3.1 percent tax rate overall. This includes auto, property and income taxes all together. Living in the mountains and forests never sounded this good!
Times and the economy are getting tough financially through these years so trying to find a way to save as much of the money you earn is essential. Looking into the cities with the lowest tax rates is a smart and efficient way to go about preserving your income. If you want your gross income to be as close to your net income, consider moving to one of these low-tax cities.