#8 Iowa
The state income tax ranges from 0.33% to 8.53%. The 0.33% applies to a taxable income of a maximum of $1,743 and the 8.53% applies to a taxable income of a maximum of $78,435.
In Iowa, the average income tax rate is high. Particularly in the case of retirees with higher-than-average incomes. Furthermore, in addition to the state tax, Appanoose County and more than 200 school districts charge their own local income taxes.
Fortunately, starting in 2023, the state’s top tax rate on income will gradually decrease. From 2026 on, a flat rate of 3.9% will be in effect. Additionally, starting in 2023, all pension income for individuals 55 and older will be tax-free. Presently, up to $6,000 of pension income is exempt.
If you want more information about taxes, you should also check out: 7 Ways You Can Prepare For a Better 2023 Tax Season NOW
