Millions of American families move from one state to another each year. And, as you can imagine, there are many reasons why you might pull up stakes and relocate to a different state. You might move to start a new job, be closer to relatives, live in a warmer climate, or even – as a sign of the times – escape a coronavirus hotspot.
But no matter why you decide to pack your bags and move across state lines, do your homework first and check out the cost of living in your destination state. You’ll want to look at the cost of housing, of course, but make sure you consider the impact of state and local taxes on your bottom line, too. As our State-by-State Guide to Taxes on Middle-Class Families shows, state tax rates for the average American family are literally all over the map — and the difference between living in a high-tax or a low-tax state can be thousands of dollars each year, depending on your family’s tax situation.
To help you determine how big of a tax bite each state would take out of your hard-earned cash, we estimated the overall income, sales, and property tax burden in each state for a hypothetical married couple with two children, combined wages of $77,000, and $3,000 of other income. Based on our findings, we put together the following list of the 10 most tax-friendly states for middle-class families (the most-friendly state is listed at the end). If you’re taking a job in another state, or relocating your family for other reasons, you’ll want to check it out to see if your state taxes are likely to go up or down after the move.