Understanding Vermont Income Tax Brackets for 2021

As a resident of Vermont, it's essential to understand how your income is taxed. The Green Mountain State has its unique set of income tax rates and brackets that apply to residents who earn a certain amount of money each year. In this article, we'll delve into the details of Vermont income tax brackets for 2021.

What You Need to Know

Vermont's income tax system is based on a progressive scale, which means that higher-income earners are taxed at a higher rate than those with lower incomes. The state has several tax brackets, each with its own tax rate and threshold.

For the 2021 tax year, Vermont residents can expect to pay anywhere from 3.55% to 8.95% in income taxes on their earnings. Here's a breakdown of the tax brackets:

* Single filers:

+ $0 - $12,150 (3.55%)

+ $12,151 - $29,900 (4.60%)

+ $29,901 - $69,350 (6.40%)

+ $69,351 and above (8.95%)

* Married couples filing jointly:

+ $0 - $24,300 (3.55%)

+ $24,301 - $59,800 (4.60%)

+ $59,801 - $138,700 (6.40%)

+ $138,701 and above (8.95%)

Other Important Facts

In addition to income tax brackets, there are other factors that can affect your tax liability in Vermont. For instance, the state also has a 6% sales tax rate, which applies to most purchases.

Another important aspect of Vermont's tax system is its estate tax exemption. In 2021, estates valued at $5.74 million or less are not subject to state inheritance taxes.

Understanding Vermont income tax brackets for 2021 is crucial if you're a resident of the state and want to ensure you're paying your fair share of taxes. By knowing where you stand in terms of income tax rates and thresholds, you can better plan your finances and make informed decisions about your tax strategy.

Remember to consult with a tax professional or financial advisor for personalized advice on managing your Vermont income taxes.

Vermont income tax brackets 2021