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So, NM has a state income tax, correct? How exactly does it work... silly question I know but we've never had to deal with them before. I'm assuming it's equal across the state - meaning the same rate statewide, not like a city and/or county sales tax.
And while we are on the subject - what about city/county taxes in the SF/Abq area?
I know I can find this on a google search but I've learned it much more fun to post and watch the games commence!! (and hopefully in more of laymen's language, not taxese)
NM has a personal income tax. If you want to get an idea of what your taxes might be like, I've found the easiest thing to do is take your federal income tax return, and use those numbers to pop into the state return for a quick and dirty tax estimate.
From the NM Tax & Revenue website, FAQ's:
1. Does New Mexico have a personal income tax?
Yes. New Mexico imposes a tax on the net income of every resident. Residents are taxed on the net income from employment, unearned income, gambling, pensions, annuities, and income from real or personal property in this state or from businesses located in this state. Non-residents are taxed on the net income from property, employment or business in New Mexico. New Mexico's personal income tax piggybacks" on the federal return and uses the federal adjusted gross income figure as its base. Net income usually equals federal taxable income, although some special deductions are available. New Mexico uses the same dollar amounts as the federal government for personal exemptions, standard deductions and itemized deductions.
2. What is New Mexico's personal income tax rate?
New Mexico uses a four-bracket, graduated-rate table ranging from 1.7% to 5.3% of taxable income.
3. Who is required to file?
Two situations require you to file personal income tax returns in New Mexico:
a. If you are required to file a federal tax return with the IRS and you are a New Mexico resident, you must file a state income tax return.
b. If you are required to file a federal income tax return with the IRS and you are a nonresident with income or loss from any business transaction, property, or employment within New Mexico, you must file a state income tax return
New Mexico doesn't have a sales tax, it levies a gross receipts tax on businesses and the businesses usually pass the tax onto the consumer/client in the same way as you would a sales tax. The state rate is 5%, I believe, and then counties and municipalities are allowed to add on additional taxes. Here in ABQ, the total rate is 6.875%, although with rounding you usually end up paying 7% (it's not like you can pay with a 1/2 a penny, KWIM?).
Santa Fe County has a property tax and I would guess that other jurisdictions do also.
In Santa Fe County it is not much by eastern US standards, but nothing to sneeze at. There are limits on increases on homeowners, so a buyer can get an unpleasant surprise when he/she gets hit with the accumulated deferred increases. I would check before I bought.
Soggy...I would add a little info to yukon's comments. Although the New Mexico rates range from 1.7 to 5.3 percent, the "ramp" is quite steep. That is, you only have to get to $16,000 of taxable income to reach the 5.3 percent...so all money above that level gets taxed at 5.3 percent. The rate between $11k and 16k is 4.7 percent. So...if you have a moderate income level, a good rule of thumb is that you can count on paying about 5 percent of your taxable income to the land of enchantment.
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but we've never had to deal with them before. I'm assuming it's equal across the state - meaning the same rate statewide, not like a city and/or county sales tax.
Property tax
