Important Tax Facts: The State of New Jersey is the worst state in the union for taxes. It has a Corporate tax rate of 10.50%, Individual tax rate of 10.75%, and the highest property taxes in the country. Additionally, it is also one of the few states that also has an inheritance tax. Read more below.
The state of New Jersey does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale, with seven (7) tax brackets. They range from 1.70% to 10.75%. The highest bracket of 10.75% starts for income greater than $5 Million.
Newark Local income tax – If you live or work in the City of Newark, the is an additional local income tax imposed on you through a Payroll Tax of 1.00%
The state of New Jersey has a Corporate Tax rate with four (4) tax brackets. They range from 6.50% to 10.50%. The highest tax bracket starts at income over $1 Million. Corporate Tax is only assessed on C Corporation. Other flow-thru entities, such as S-Corps, LLCs and LLPs are not subject to the Corporate Tax, rather they are subject to the individual owner’s individual income tax.
Like many states, New Jersey has multiple tax rates. One at the state level and another at the local level. The state rate is 6.63% the average local rate is -0.03%* (total average rate for New Jersey Sales Tax is 6.60%).
Note* that some jurisdictions are not subject to a state rate, and instead collect a higher local rate of 3.30%, bringing the average local rate to be negative.
The average property tax rate for residential property in the state of New Jersey is 2.21%, which is the highest in the union as far as Property Tax as a Percent of a taxpayer’s main home.
New Jersey is one of only six (6) states that has an inheritance tax. Depending on the type (or class) of beneficiary, you could be assessed inheritance tax. A few important points:
Learn more about New Jersey’s inheritance taxes in the links below:
Payroll (Unemployment Insurance) taxes are paid by business on the behalf of their employees to fund unemployment insurance to the state. It consists of multiple factors. Below is an outline of the most common ones in New Jersey –
New Jersey has an average cost of opening an LLC. Here are some important facts:
Don’t keep yourself in the dark!
We know that the tax code is so overwhelming that people fall into a state of paralysis even before they even get started.
TaxedRight is here to help educate you and make you not afraid.
Sign up for my free newsletter with tips and tricks that help you keep up to date with what’s going on in tax and finance!
You may unsubscribe at any time.
Copyright © 2020 Taxed Right LLC. TaxedRight, TaxTicker, illustrations such as pigs and coins, are all trademarks of Taxed Right LLC. All rights reserved.
