How to Calculate North Carolina State Income Tax

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In North Carolina, four tax brackets are used to determine the income tax rates for individuals. People earning higher incomes are taxed at higher rates, though it's frequently possible to save some money by applying tax deductions to your income.

Things You'll Need

  • Income tax professional (recommended)
  • Calculator
  • W-2 statement of employee earnings

Know the North Carolina Tax Brackets

  • Use the lowest tax rate in the state, 6 percent, if you made approximately $12,800 or less in income that qualifies for taxation.

  • Know that the majority of North Carolina residents fall into the 7-percent tax bracket, which applies to incomes ranging from approximately $12,800 to $60,000.

  • Pay the adjusted rate of 7.75 percent if you made approximately $60,000 to $120,000.

  • Fall into the high tax bracket if you made approximately $120,000 or more last year. Individual incomes at this level are taxed at 8.25 percent.

Figure out Your North Carolina State Income Tax

  • Add up all the money you made throughout the year, from all sources that count as personal income. This includes not only wages from your job, but also profit from any businesses you operate and any money you made via investing.

  • Ask a tax professional for help if you want to know more about the tax deductions for which you qualify. Calculate the total of all the deductions you're allowed to subtract from your total income, arriving at your taxable figure.

  • Find the tax rate that applies to you, and do some simple multiplication to calculate what you owe. As an example, suppose your taxable income for the year totaled $55,000. To calculate your income tax, you would use the percentage rate that applies to the tax bracket you fall within (in this case, 7 percent). Then, using the decimal expression of the percentage rate (in this case, 0.07), punch up the numbers in a calculator.

Tips & Warnings

  • An income tax preparation professional can help you understand all the tax deductions for which you qualify. Work with one if personal finance isn't your strong suit.
  • Uncle Sam is unkind to those found guilty of tax evasion. Don't risk fines or jail time by cheating on your taxes. It's not worth the relative pittance you'd save in taxes.

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