TaxesState vs. Federal Taxes Cheat Sheet
A practical cheat sheet comparing state and federal taxes, covering income tax differences, tax brackets by state, IRS tax rates, and tax planning strategies.
💡 Key Takeaways
- Federal Taxes apply nationwide; state taxes vary widely in rates and rules.
- Planning Matters: Consider both federal and state obligations for accurate tax strategy.
- State Structures Differ: No-tax, flat-tax, and progressive-tax states impact total liability.
- Dual-State Considerations: Living in one state and working in another can complicate filings.
🏛️ Key Differences Between State & Federal Taxes
| Feature | Federal Taxes | State Taxes |
|---|
| Tax Authority | IRS (Internal Revenue Service) | State Revenue Departments |
| Tax Rates | Progressive (10% – 37%) | Varies by state (flat or progressive) |
| Standard Deduction | $15,000 (single), $30,000 (married) | Varies by state |
| Income Types Taxed | Wages, investments, business income | Some states exclude certain income types |
| Deductions & Credits | Federal deductions apply nationwide | State-specific deductions vary |
📊 State Income Tax Structures
- No Income Tax States: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming.
- Flat Tax States: Arizona (2.5%), Colorado (4.4%), Illinois (4.95%), North Carolina (4.75%), Utah (4.85%).
- Progressive Tax States: California (1% – 13.3%), New York (4% – 10.9%), Oregon (4.75% – 9.9%).
🇺🇸 Federal Tax Brackets (2025)
| Tax Rate | Single Filers | Married Filing Jointly |
|---|
| 10% | Up to $11,925 | Up to $23,850 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 |
| 37% | Over $626,350 | Over $751,600 |
🧾 Tax Planning Strategies
- Consider State Tax Rates When Moving – Some states have lower tax burdens.
- Maximize Deductions & Credits – Combine federal and state deductions to reduce taxable income.
- Plan for Retirement Taxation – Some states exempt retirement income.
- Monitor Legislative Changes – Tax laws can change frequently at both state and federal levels.
⚠️ Common Pitfalls & How to Avoid Them
- Ignoring State Tax Obligations – Even after moving, prior-state taxes may apply.
- Overlooking State-Specific Deductions – Research available tax breaks.
- Failing to Plan for Dual-State Taxation – Understand rules if living in one state and working in another.
🛠️ Tools & Resources
- IRS Tax Calculators – Estimate federal tax liabilities.
- State Revenue Websites – Check local tax rates, forms, and guidance.
- Financial Advisors – Personalized advice for multi-state tax planning.
| Tool | Purpose |
|---|
| IRS Calculator | Estimate federal taxes |
| State Tax Sites | Research local rules and deductions |
| Tax Advisor Consultation | Plan for state/federal coordination |
