Colorado Income Taxes (Denver, Greenwood Village: vehicle registration, neighborhood, property tax rates)

[justsomeguy]

I understand that Colorado has a flat rate income tax of 4.63%, but how exactly is that applied? E.g. if I earn $20,000 (making that number up) and take the federal deduction of $12,000, my federal reported income is $8,000 - does the Colorado flat tax apply to the $8,000 I reported as federal income, or $20,000 gross income I earned? I searched online and didn't think I found a clear answer.

Secondly, are there any local Denver (or surrounding areas) city/municipal income taxes to be aware of, in addition to the flat state tax?

Lastly, but less importantly, any input on property tax rates/deductions/exemptions would be welcome as well.

Thanks.

[bluescreen73]

It's applied to your federal taxable income amount.

Additionally because the Trump tax cuts actually created a net tax hike for most Coloradans (by eliminating deductions and increasing the taxable income amount), it was just announced that the state income tax rate is going down (temporarily) to 4.5% in 2020.

Some places do have a head tax. Greenwood Village does, and I believe Denver does as well.

Property taxes vary by city and even neighborhood, but as a general rule of thumb they are considerably lower than Texas. Watch out for Metro Districts. Texas has them as well. They're called MUDs down there. Metro Districts have much higher tax rates due to all the bond repayments for infrastructure being placed on homeowners in the neighborhood. They have been getting a lot of bad publicity lately due to major debt problems trickling down to homeowners in the form of considerable property tax hikes.

Vehicle registration contains an ad valorem component that is tied to the taxable value of the vehicle. It decreases every year until the car hits 10 years old then it's capped at $3. For a new car it's around 2% of the tax value. It can cost you several hundred dollars to register a brand new car.

Here's a hypothetical example - a 2020 or newer model Car/SUV registered in Arapahoe County with an MSRP of $35000 will cost roughly $725 in Year 1. Year 2 it'll drop by almost $200. My car (2011 Fit) will be roughly $103 this year. Most counties have an estimation tool on their websites.

[justsomeguy]

Originally Posted by bluescreen73

It's applied to your federal taxable income amount.

Additionally because the Trump tax cuts actually created a net tax hike for most Coloradans (by eliminating deductions and increasing the taxable income amount), it was just announced that the state income tax rate is going down (temporarily) to 4.5% in 2020.

Some places do have a head tax. Greenwood Village does, and I believe Denver does as well.

Property taxes vary by city and even neighborhood, but as a general rule of thumb they are considerably lower than Texas. Watch out for Metro Districts. Texas has them as well. They're called MUDs down there. Metro Districts have much higher tax rates due to all the bond repayments for infrastructure being placed on homeowners in the neighborhood. They have been getting a lot of bad publicity lately due to major debt problems trickling down to homeowners in the form of considerable property tax hikes.

Vehicle registration contains an ad valorem component that is tied to the taxable value of the vehicle. It decreases every year until the car hits 10 years old then it's capped at $3. For a new car it's around 2% of the tax value. It can cost you several hundred dollars to register a brand new car.

Here's a hypothetical example - a 2020 or newer model Car/SUV registered in Arapahoe County with an MSRP of $35000 will cost roughly $725 in Year 1. Year 2 it'll drop by almost $200. My car (2011 Fit) will be roughly $103 this year. Most counties have an estimation tool on their websites.

So just to confirm, in the example I gave, it would be $8,000 (after $12k federal standard deduction) rather than $20,000 income that was taxed?

[reed303]

Originally Posted by justsomeguy

So just to confirm, in the example I gave, it would be $8,000 (after $12k federal standard deduction) rather than $20,000 income that was taxed?

Basically correct, subject to any Colorado addbacks or subtractions ( most people don't have any)

Forms are here if you want to do a "what-if" return.

https://www.colorado.gov/pacific/tax...l-income-forms