If you live in the DC metro area, you will know you have a choice between living in DC, Virginia or Maryland. Here is a little info to think about when picking your piece of the world to call your very own.
Here is how the Virginia State income tax rates are structured:
If your income range is between $0 and $3,000, your tax rate on every dollar of income earned is 2%.
If your income range is between $3,001 and $5,000, your tax rate on every dollar of income earned is 3%.
If your income range is between $5,001 and $17,000, your tax rate on every dollar of income earned is 5%.
If your income range is $17,001 and over, your tax rate on every dollar of income earned is 5.75%.
Here is the DC income tax structure:
If your income range is between $0 and $10,000, your tax rate on every dollar of income earned is 5%.
If your income range is between $10,001 and $30,000, your tax rate on every dollar of income earned is 7.5%.
If your income range is $30,001 and over, your tax rate on every dollar of income earned is 9.3%.
And Here is Maryland:
If your income range is between $0 and $1,000, your tax rate on every dollar of income earned is 2%.
If your income range is between $1,001 and $2,000, your tax rate on every dollar of income earned is 3%.
If your income range is between $2,001 and $3,000, your tax rate on every dollar of income earned is 4%.
If your income range is $3,001 and over, your tax rate on every dollar of income earned is 4.75%
From the graph above, we can see that for example, if you live in VA (this calculation is done without any other deductions), and you make $55,000 a year, you will pay about $2905 in income tax a year. And if you lived in DC, you will pay $4325, and $2560 if you lived in Maryland. Therefore, it is cheapest to live in Maryland. Now, is this is the reason why all the rich well to do individuals in the DC metro area live in Potomac Maryland? So, on a $55,000 salary, you will be paying $1402 more to live in DC than Virginia, and $1765 more to live in DC than Maryland. But now we wonder – why do us young professionals love living inside DC?
I guess we love the night life and the convenience – but now, we must stop and think – where do all the RICH SINGLES live? We need to live near them in order for them to incorporate us easily into part of their world!
Moreover, before you meet that RICH man of your dreams – you better think about your own finances, and think whether it is worth paying the premium taxes just to live in DC.
2 comments:
I like the comparison. But I guess if you work in DC, it is much easier of a commute to also live in DC? Like as is in NYC, if you live in NJ, you would save some tax, but do you want to bother with the 1 hour commute to work every morning and night?
ahhh - the difference between DC and NYC - if you live just outside of DC in Northern VA, then your commute can be as short as 10 min door to door. Does that make it more worth it? You'll still need to commute!
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