Personal Finance

Illinois residents looking to save on taxes may want to start by getting estimates on a move to Alaska.

At least that’s the recommendation from personal finance website GOBankingRates, which published a study Tuesday that rates the most and least tax-friendly states for the middle class. The study compared total sales tax, property tax and personal income taxes paid by the middle 20 percent of households.

GOBankingRates compiled data from the Institution of Taxation and Economic Policy’s 2018 “Who Pays” report.

Top 10 most tax-friendly states:
• Alaska
• Delaware
• Nevada
• Wyoming
• Montana
• Florida
• Tennessee
• Idaho
• South Carolina
• North Dakota

It’s not surprising that states with no income tax, such as Alaska, Nevada or Florida, fare better, said Andrew DePietro, study researcher and data analyst.

However, states that don’t levy individual income must find revenue from other sources. This also factored into the rankings.

New Hampshire, for example, ranked 12th on the list. Although the state doesn’t tax incomes, New Hampshire does have higher property and state taxes.

The states lower on the list all had higher state tax rates — with Illinois residents forking over a whopping 12.6 percent of state taxes paid by the middle 20 percent.

The 10 least tax-friendly states:
• Illinois
• Connecticut
• New York
• Hawaii
• Kentucky
• Indiana
• Pennsylvania
• Nebraska
• Maryland
• Iowa

More from Personal Finance:
3 tips to help you boost your tax-free retirement income
Work a lot? You can save more for retirement, too
Failed to withhold enough in 2018? The IRS has a surprise for you

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