Tax season comes every year, and almost worse than having to pay your taxes is the process of filing them. It doesn’t have to be that way, though; use our state tax calculator to make your life a whole lot easier. North Dakota has its own peculiarities that you should be aware of as you head into tax season, so we’ve also compiled information on all the various taxes — as well as deductions, exemptions, and credits that could save you money this year.
It’s crucial to be sure that you fulfill all of your tax obligations, as forgetting to do so can lead to a major headache. The last thing you want to deal with all summer long is a costly and time-consuming audit. Be sure you’re informed as you head into tax season by using our North Dakota state tax calculator, and find out everything you need to know by reading through our explainer on various taxes you’ll be responsible for.
As you might already know, in addition to filing your federal taxes to the US Federal Government, you must also file a tax return for the state you live in. Every state’s tax system is a little different, and some are very different, so if you’ve moved recently or are considering moving to another state, it’s important to familiarize yourself with the local tax structure.
State taxes are often spent on socially necessary institutions like schools, roadwork, and emergency services. So, there’s no need to be too upset about paying them. That said, you still want to file everything correctly so that you’re not overpaying and losing some of your hard-earned income, or underpaying, and incurring a possible audit.
North Dakota Taxes: Quick Facts
Income tax: 1.1% - 2.9%
Sales tax: 5%
Property tax: 1.42% average
North Dakota’s income tax rates are pretty low, but it’s important to remember that income taxes are not the whole of your tax burden. In addition to the portion you pay from your monthly paychecks, you’re also paying sales taxes on transactions in your state, property taxes if you own any real estate, and excise taxes on drinking and smoking. We’ll cover all that and more in our guide.
North Dakota State Tax Brackets
Income taxes are the amount that you see removed from your paycheck each month. Like most states, North Dakota has a progressive tax structure. That means that the more you make, the greater your fair share of taxes. Still, even for the highest earners, North Dakota’s income taxes are pretty low.
The rate at which you’re taxed is based on your level of income as well as your filing status. To get an idea of the bracket you’ll fall into when filing North Dakota taxes, take a look at the table below. Simply determine your filing status (whether you’re single, married filing separately, a head of household, or married filing jointly), then find the range your income falls into, and see what percentage rate you’ll pay in income tax.
Rate of tax:
$ 0 - $38,700
$38,700 - $93,700.
$425.70 + 2.04% of amount over $ 38,700
$93,700 - $195,450
$1,547.70 + 2.27% of amount over 93,700
$195,450 - $424,950
$3,857.43 + 2.64% of amount over 195,450
$9,916.23 + 2.90% of amount over 424,950
Married Filing Joint & Qualifying Widow(er)s
Rate of tax:
$0 - $64,650
$64,650 - $156,150
$ 711.15 + 2.04% of amount over $ 64,650
$156,150 - $237,950
$2,577.75 + 2.27% of amount over 156,150
$237,950 - $424,950
$4,434.61 + 2.64% of amount over 237,950
$9,371.41 + 2.90% of amount over 424,950
Married filing separately
Rate of tax:
$0 - $32,325.
$32,325 - $78,075
$355.58 + 2.04% of amount over $32,325
$78,075 - $118,975
$1,288.88 + 2.27% of amount over $78,075
$118,975 - $212,475
$2,217.31 + 2.64% of amount over $118,975
$4,685.71 + 2.90% of amount over $212,475
Head of Household
Rate of tax:
$0 - $51,850
$51,850 - $133,850
$ 558.80 + 2.04% of amount over $ 51,850
$133,850 - $216,700
$2,198.96 + 2.27% of amount over $133,850
$216,700 - $424,950
$4,044.47 + 2.64% of amount over $216,700
$9,435.35 + 2.90% of amount over $424,950
Because this tax code specifies marginal rates, you only pay the sum and percentage above income made at a given level, not on your entire income. This is helpful for individuals and families near thresholds who might worry about having their income overly taxed. Your effective tax rate is lower than the rate at your highest bracket. That’s because all the money you make under your highest bracket is being taxed at its respective lower rate.
Before we move on, here are a few North Dakota personal income tax facts to consider:
The median household income in North Dakota is around $61,000
That puts a family making near the median income in the lowest income tax bracket if they are a married couple, and in the second to lowest for all other filing statuses.
A median income North Dakotan pays the highest rate as a head of household, at $ 558.80 + 2.04% of any amount over $ 51,850.
Figuring out where you and your family falls can be tricky. If you need help sorting out your tax bracket and figuring out how much you need to pay, feel free to reach out to a Community Tax preparation professional.
Our pros make filing income tax a breeze. Give us a call!
Capital gains taxes are imposed on money you make by purchasing and selling shares on the stock market, investing in real estate and selling it at a profit, or profits made from the sale of any other asset. The federal government taxes capital gains at different levels depending on the amount of money gained and how long you had them before they were sold.
The minimum rate for the federal government is 0% tax under about $40,000, and the maximum rate is 23% for amounts above around $440,000. (These are approximations, as rates change depending on the years.)
North Dakota also imposes its own capital gains tax. The top rateis 3.2% of the amount you profited from the sale of your assets. Rates can change year-to-year and depending on the laws introduced in the state legislature, so be sure you are aware of the current rate for the year you file.
North Dakota State Sales Tax
Sales taxes are imposed on transactions that occur within the state. There is no federally mandated sales tax, so states determine on their own what rate they will apply. In fact, some states — like Delaware and Oregon — don’t even impose a sales tax at all!
North Dakota is not, unfortunately, among those states. The state-imposed sales tax in North Dakota is 5%. However, the state also permits counties, cities and towns to impose their own local sales tax rate on top of this. Rates in various localities can range from an additional 1% to an additional 3%.
That means, in effect, the sales tax in North Dakota can range from 6% to 8%. It’s good to know ahead of time how much the sales tax is before going all-in on a large purchase. If you’re buying a TV or fridge and you live in Crosby (which has an 8% rate) it might be worth it to drive into Williston (with a 7% rate) for a lower price.
North Dakota Excise Taxes
States often levy excise taxes on products and services that are considered luxuries. Certain excise taxes are also popularly known as “sin taxes” because they are applied to goods or services that are considered harmful if used excessively. Commonly sin taxes are imposed on alcohol, tobacco, gasoline, sex work, and marijuana in states where it’s legal either recreationally or medically.
North Dakota, like many states, imposes an extra tax on tobacco, in part because of its negative health effects. The state effectively has two different rates for tobacco:
Cigarettes: $0.44 for a pack of 20, or $0.55 for a pack of 25
Pipe tobacco and cigars: 28% of the wholesale price.
While taxes imposed on the wholesale price of a product fall on the retailer, the cost is often pushed along to the consumer, so bear in mind the cigar and pipe tobacco tax may affect the price of the products you buy.
States impose taxes on fuel as a way to bring in extra revenue for common infrastructure projects. Public works like road repairs, bridge maintenance, and other important parts of transportation infrastructure are commonly paid for at least in part by the taxes imposed at the pump. The rates for common fuels in North Dakota include:
Gasoline: $0.23 per gallon
Specialty fuels: $0.23 per gallon
Aviation fuel: $0.08 per gallon
North Dakota Insurance Tax
Because of a recent change in the Affordable Care Act legislation, North Dakotans are no longer responsible for paying a fee for not having healthcare.
The state does impose a tax on premiums collected by insurers. This is not directly imposed on state residents, but taxes on premiums are often passed along to consumers in the form of higher premiums to match the tax rate.
North Dakota State Property Tax
Property taxes are one of the largest contributions you’ll make in a given year, alongside sales tax and income tax. In North Dakota, however, property taxes are in the middle of the pack on a couple of different measures. Property taxes are paid as a percentage of the assessed value of your property. North Dakota’s rate of property taxation is variable by county, so there is no uniform rate of taxation in the state. However, most counties are not too far from the average rate of 1.42% of the value of the property.
Here’s a brief overview of the range of property tax liability they can expect in the state:
Rates are lowest in Billings County, at only 0.46%
The average in North Dakota is 1.42%
The highest rates are found in Cass County, topping out at 1.87%
One of the most important measures of property tax burden is how it relates to the money you’re bringing home. Here are a few quick facts to note about North Dakota’s property tax rates and how they relate to income.
The median property tax is $1,658: 25th in the country, so solidly the median amount nationally.
As a proportion of income, North Dakotans pay 2.67% in property tax — 27th in the country.
As a percentage of property value, the rate is 1.42%, which is the 10th highest in the nation.
Estate taxes are imposed on assets left behind to surviving kin after someone passes away. Some states do still have estate taxes on the books, as well as inheritance taxes (the two differ slightly). North Dakota, however, does not impose an estate tax. Since 2005, when the law was repealed, all estates passed on in North Dakota are not subject to taxation.
That does not mean that North Dakotans are completely free of estate taxes, though. Above certain amounts (as of 2019, $11.4 million) the Federal Government does levy an estate tax, so the associated paperwork will need to be filed when you complete your federal tax returns. . Be sure to speak with a tax expert when planning your estate to be sure that you are able to pass on as much as you can to your loved ones.
North Dakota State Tax Credits
States looking to offer ways to lighten the burden on taxpayers have three common mechanisms to do so: tax credits, deductions, and exemptions. Tax credits are dollar-for-dollar reductions in the amount you owe the state or Federal Government. Deductions reduce your taxable income, to mitigate the amount that you’re taxed. Exemptions make a portion of your income or assets exempt from taxation, which also serves to reduce the amount you’re taxed and the amount you owe.
Tax deductions allow taxpayers to reduce their burden by deducting an amount from their taxable income — that means that some of their income is paid out completely untaxed. The State of North Dakota often refers to these as subtractions, but they are essentially the same thing: a way to reduce the amount you owe, or increase your refund if you overpaid!.
There are two ways that North Dakota uses deductions to ease the burden on taxpayers. The first is indirect: North Dakota taxpayers are liable only for their Federally taxable income. How does that help? It means that after you factor in your Federal standard deduction (as well as other deductions and exemptions), only that new amount is considered taxable by the state. That means that even though North Dakota does not offer its own set of standard deductions, you’ll still benefit from the federal standard deductions when filing your state return.
With so many possible taxable income sources — including property, your paycheck, and capital gains, it can be hard to keep everything straight. Let’s just be honest: filing state taxes on top of your federal taxes is a headache. And if you’re hoping to maximize the amount that you benefit from through deductions, tax credits, and exemptions, you’ve got your work cut out for you.
Our guide and the calculator at the top can help give you a ballpark estimate for your taxable income. For more help on your state and federal tax returns, consider consulting with a tax expert. Community Tax’s team of expert tax preparers can help you get the refund you deserve. Plus, with expert tax preparers helping, you can avoid worrying audits or mistakes in filing.
Before you sit down to start the process of filing your state or federal taxes, it’s good to make sure you have these items handy:
Statements of earnings from any investments you’ve made.
Your social security number.
Proof needed for any exemptions you’re applying for.
How to Pay North Dakota Taxes
When it comes time to sit down and pay your North Dakota state taxes, you have a couple of different options. If you’ve done your taxes the old fashioned way, with paper and pencil, you can mail your completed return to this address:
Office of the State Tax Commissioner
PO Box 5621
Bismarck, ND 58506-5621
If you completed them online, you can make an account online at the North Dakota Taxpayer Access Point. Once you’ve input the correct information, simply follow the prompts to pay what you need — or see whether you’re in fact due a refund instead!
Now that you’ve worked your way through our guide to North Dakota’s taxes, reward yourself with some fun and interesting tax facts:
Summary of Federal Taxes
As you know, state taxes are not the end of your tax burden. You’re also responsible for your federal taxes every year. Tax brackets and the complicated rules involved in calculating them may be different on your federal tax return than at the state level.
If you’re having a little trouble navigating the complicated systems of federal taxation, don’t hesitate to contact a Community Tax representative. Our experienced tax preparation experts are here to help you make the most of your yearly returns, so you pay only what you should while helping you avoid a costly and time-consuming audit.
Call us to stress less and save more on your federal tax refund.
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