Here's how much of your paycheck will get chopped off because of Minnesota taxes in 2017.
The state on Wednesday put out what's called the tax rates and brackets for next year. It essentially tells you what percentage of your income you'll pay in taxes, depending on how much you make. Broadly speaking, the more you make, the higher your tax rate will be on that increased income.
What's my tax rate?
The charts are laid out in kind of a confusing way, and it's broken out into four sections based on how you file your taxes – married joint, married separate, head of household, or single. Here's a look.
Basically, find the one that matches how you're filing (so if you're single or not married, you're probably filing as single, for example). Then find how much money you make in a year (or close to it, if you're estimating).
On the lefthand side of the charts you'll see a percentage. That's how much you'll owe on your income taxes in 2017 for each bracket.
The lowest rate possible is 5.35 percent. If you're single and make anywhere from $0 to $25,390, you'll owe that 5.35 percent. If you're married and filing a tax return together, the range for 5.35 percent is $0 to $37,110.
The more you make, the higher rate you end up paying for dollars in each tax bracket. So let's go back to the single one again.
Let's say you earn $75,000 in a year. You'll pay 5.35 percent tax on the first $25,390 you earned (which is $1,358.37). Then you'll pay 7.05 percent on your income from $25,391 through that $75,000 (since it's within the tax bracket that goes up to $83,400).
That's applicable to the whole thing. So
The highest the tax rate gets is 9.85 percent. That's for income people make above $130,761 if they're filing as married but separate. Married couples who file together only pay that rate on any income above $261,511.
Is this the same as before?
The tax rates – so the percentages – are the same as 2016.
What's different is the brackets. In 2017, you can earn a little bit more, but still stay within a lower tax bracket.
Example (and we'll look at the filing as single one again): In 2017, you can earn up to $25,390 and still pay the lowest tax rate of 5.35 percent. Last year, you could only earn up to $25,180 to pay that 5.35 percent rate.
The increases are 0.8 percent – which the sate's Department of Revenue says it's to keep up with inflation – so if you get a small raise, it doesn't bump you into a higher tax bracket.
For the high-earners, the dollar difference is even more pronounced. Filing as a head of household in 2017 means you'll pay the highest tax rate of 9.985 percent only on income of more than $209,211.
Last year that was the case if you earned at least $207,541.
A couple things to remember: This is only income tax. Things like sales tax (the extra money tacked on when you buy most things at the store) are separate. Also, there are federal taxes you'll owe as well.
You need to file your taxes by April 18, 2017.
(Correction: The original version of this story did not explain that the tax rates in each bracket only apply to income in that range. The story has been updated to reflect more accurate information.)