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I am not trying to challenge anyone on the forum, but outside of housing, I am not sure how people save so much money from California to Indiana.
Car insurance--I pay $200 less per year to insure a '16 and '17 Lexus in California.
Health insurance--the insurance market is much larger in California, so overall plans on the state exchanges and the portion people pay for employment based insurance is lower than the national average in California. I haven't paid this little for health insurance in Indiana since the late 90s. And the coverage is excellent in California.
My $700K house in San Diego is less to insure than my $350K house in Carmel.
Gas prices, Electricity, water.....gas is pricey, electricity is more per kilowatt hour, water, probably more.
Taxes: the property tax rates are both 1%, but Indiana can have special assessments, and if it's not your primary home, or a rental, you will pay 2% of the assessed value. In California, it's at 1 to 1.25, and California has caps on how much it can raise your property taxes per year.
State taxes: no question the state of Indiana has a lower tax rate overall, but Indiana has locality taxes that on average, are 7% of your income....starting from $0. You wont even start to pay a 7% tax rate in California until your income goes above $105,000.
Some of this is subjective....car insurance, health insurance, homeowners insurance can range based on where you work, where you live, the car you drive, ect. State taxes can be more than Indiana, but for those with incomes below $100K, I would challenge anyone to compare a W2 from Indiana to California, add it up and see who paid more.
As for housing, I think we can all agree California housing is pricey and a major issue of affecting affordability.
I am not from California, but lived in Carmel for three years. Most of this is anecdotal to demonstrably wrong. For comparison, I now live in a small town in Tennessee.
7% income taxes? How? The state is 3.23%, and if you live and work in Hamilton County, it's only a 1% local tax. Most state and local taxes are going to be under 5%. Yes, it's a flat rate, but a far cry from a 7% flat rate. Most other counties in metro Indy will still be under 6% total.
I have no idea on what CA car insurance rates are, but at the time I left Carmel, I was paying about $260/six months for full coverage on a 2013 Elantra. That tripled moving back to Tennessee, and more than negated any registration fee savings. I can't imagine a
Gas? You mean natural gas? A gallon of 87 is about $2.45 in Carmel now. The average price in SD is $3.38. They aren't even comparable.
I'm not even sure what you're trying to say about the health insurance costs.
For a direct comparison from Indiana to California—everyone tries to warm me how expensive it is in California, and what I am saying is outside of housing prices, gas for the car and electricity, I don’t see a difference and can’t point to areas where I saved money. For those who are wondering about the taxes, I made about $180k/year in Indiana and made over $250k this past year in California, and have had my fair share of looking at tax returns and trying to figure how to save money.
For taxes, since we are in an Indiana forum, the state tax for all incomes is 3.23%. But that’s not all you pay in deductions for state and local taxes. Indiana is one of seven states that has locality taxes, so cities, counties and townships tax paychecks as well. In Hamilton county, it’s an additional 1%. In Marion county, it’s 2%. So regardless of income if you live Indianapolis, you are paying 5.23% of income tax starting from the first dollar you make. We haven’t even gotten to city taxes yet, or township taxes. For those who live in Clay township in Carmel, you pay a payroll tax to them as well.
I come to 7% for a total state and local tax of Indiana based on bankrate.com research for each state. They average what all the court rates were with the local taxes included. Some places are over 9% once you include the local taxes. This isn’t the sales tax, this is payroll deduction.
Those who live in Indiana and have a w2 can add this up.
Now I probably lose everyone when I say you pay less income tax when you move to California. In California, you pay 1% tax on the first $19k you make. Then between 19k and 36k it’s 2%. You don’t get to a 6% tax rate until you make above $81k/year. There’s a lot of tax brackets.....all the way up to 13.3%, but you have to make above 1.1 million a year to START paying that rate. For high income earners,you are going to pay more in California than Indiana. But the majority of people don’t have incomes far above the $100k mark.
I thought Indiana was a panacea of low taxes until two years ago as well. Honestly, you are going to pay it somewhere, be it property taxes, income taxes, etc. Do a side by side comparison.
I moved from south Florida (Miami Dade County) up to Lafayette, Indiana 18 months ago. Just a comparison:
Florida: homeowners' insurance: $4,200.00 (darn hurricanes!)
Indiana: homeowners' insurance: $675.00
Florida: Automobile insurance: $2,000.00 (I had no accidents, no tickets)
Indiana: Automobile insurance $450.00
For a direct comparison from Indiana to California—everyone tries to warm me how expensive it is in California, and what I am saying is outside of housing prices, gas for the car and electricity, I don’t see a difference and can’t point to areas where I saved money. For those who are wondering about the taxes, I made about $180k/year in Indiana and made over $250k this past year in California, and have had my fair share of looking at tax returns and trying to figure how to save money.
For taxes, since we are in an Indiana forum, the state tax for all incomes is 3.23%. But that’s not all you pay in deductions for state and local taxes. Indiana is one of seven states that has locality taxes, so cities, counties and townships tax paychecks as well. In Hamilton county, it’s an additional 1%. In Marion county, it’s 2%. So regardless of income if you live Indianapolis, you are paying 5.23% of income tax starting from the first dollar you make. We haven’t even gotten to city taxes yet, or township taxes. For those who live in Clay township in Carmel, you pay a payroll tax to them as well.
I come to 7% for a total state and local tax of Indiana based on bankrate.com research for each state. They average what all the court rates were with the local taxes included. Some places are over 9% once you include the local taxes. This isn’t the sales tax, this is payroll deduction.
Those who live in Indiana and have a w2 can add this up.
Now I probably lose everyone when I say you pay less income tax when you move to California. In California, you pay 1% tax on the first $19k you make. Then between 19k and 36k it’s 2%. You don’t get to a 6% tax rate until you make above $81k/year. There’s a lot of tax brackets.....all the way up to 13.3%, but you have to make above 1.1 million a year to START paying that rate. For high income earners,you are going to pay more in California than Indiana. But the majority of people don’t have incomes far above the $100k mark.
I thought Indiana was a panacea of low taxes until two years ago as well. Honestly, you are going to pay it somewhere, be it property taxes, income taxes, etc. Do a side by side comparison.
Just because YOU can't see it doesn't mean everyone else can't see how much more affordable Indiana is.
The Pay it somewhere logic is absolutely comical considering study after study has shown that to be false. Crunch it in a cost of living calculator. $65,000 a year in Indianapolis is equal to or better than $100,000 a year in California.
So it looks like if you don't make much money, then technically, you'll be taxed more on the state level living in Indiana than in California. But once you're a high income earner, then the opposite is true. Am i understanding that correctly? Also, did you factor in the SDI that California makes its residents pay?
So it looks like if you don't make much money, then technically, you'll be taxed more on the state level living in Indiana than in California. But once you're a high income earner, then the opposite is true. Am i understanding that correctly? Also, did you factor in the SDI that California makes its residents pay?
SDI is less than 1%, and I didn’t factor that into a state income tax rate since it pays you a benefit. I would consider it more like insurance, and Indiana doesn’t have anything like it.
No question that if you are a high earner, you will pay more in CA than IN. But if you make a modest to regular salary, the tax rates of California would come out in your favor. Let’s say you lived in Indianapolis and magically got out of paying any city taxes. Your rate would be 5.23%. Starts from the first dollar you earn....
Salary $19,000: tax rate of 1.5% in CA, (single). 5.23% in IN (Marion county, no city taxes included yet)
Salary $58,000: tax rate of 2.9% in CA (married). 5.23% in IN, same as above with no city taxes.
These are calculated using the state tax rates published on bankrate.com. Neither would be buying a house in California, but they would pay less taxes than they would in Indiana.
I never said California was more affordable than Indiana as stated from other posters. I am saying that people at low and moderate incomes, as demonstrated above would pay less STATE taxes in CA than IN. The OP was not a high income earner and had minimal assets. Could they afford Indiana easier? Probably. My point is not everything is cheaper and some things are more expensive. Since housing is hands down less expensive, it’s probably going to be more affordable.
Insurance is an individual rate driven by credit, location and what you are insuring. Indiana is cheaper than many states. Kentucky, Tennessee and Florida are notable for high car insurance. If I can insure 2 high end cars with full coverage for $1200/year in CA, than someone with a 10 year old Hyandai should be able to insure their car in CA without paying through the nose.
Homeowners insurance falls under the same category. My home here is nice with some welaborate features, but not on the same scale of my IN house. The premiums are close.
I wouldn’t talk anyone out of moving to Indiana from California, but it’s not a simplistic equation you will save money on everything and it’s going to be a dramatic difference. A high income earner, someone who is making more than $200k/year, would notice a state tax difference. Housing is less. You can get a lot more house for your money. Something we can all agree on.
Let’s say you lived in Indianapolis and magically got out of paying any city taxes. Your rate would be 5.23%. Starts from the first dollar you earn....
Salary $19,000: tax rate of 1.5% in CA, (single). 5.23% in IN (Marion county, no city taxes included yet)
Salary $58,000: tax rate of 2.9% in CA (married). 5.23% in IN, same as above with no city taxes.
I think you mean Indiana state income tax is 3.23%. Counties then have their own taxes ranging from about 0.3% to 2.8%. In Indianapolis (Marion County) it's 2%, in Carmel (Hamilton County) it's 1%.
To be fair, you WOULD need to include California's SDI (temporary disability) tax of 1%. Yes, some people benefit from it, but you can say the same about county income taxes.
Using the site smartasset.com:
Estimated California (90001) income tax for $19,000, filing single, is $214.
Estimated California (90001) income tax for $58,000, married filing jointly, is $1,044
Estimated Indiana income tax (46201, Marion County) for $19,000, single, is $581
Estimated Indiana income tax (46201, Marion County) for $58,000, married, is $1808
For the income you stated for yourself:
Estimated California tax (90001) income tax on $250,000, filing married, is $17,211
Estimated Indiana tax (46032, Hamilton County) income tax on $180,000, filing married, is $5748
Estimated Indiana tax (46032, Hamilton County) income tax on $250,000, filing married, is $8009.
All of you who have brought actual data and sources: Thank you! These are great for doing "what-if" calculations.
One question, though...ndindy has mentioned "localities" with regard to income taxes over and above the state and county ones, but no one else has (or I missed it). What localities do you mean, and where can I find a good source?
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