Mississippi Salary Paycheck Calculator

Mississippi Taxes: What You Need to Know 

Understanding Mississippi’s tax structure is crucial for accurately estimating your take-home pay. The Magnolia State’s tax system encompasses federal, state, and local withholdings and various deductions that significantly impact your net income.  

Let’s delve deeper into each component below. 

Federal, State, and Local Tax Withholdings 

These taxes form the foundation of your paycheck calculations: 

• Federal Income Tax: Follows the progressive tax system set by the IRS, with rates ranging from 10% to 37% based on your income bracket. 

• Mississippi State Income Tax: As of 2024, Mississippi uses a flat tax rate of 4.70% on taxable income over $10,000. This simplified system replaced the previous graduated tax system, making calculations more straightforward for both parties (i.e., employers and employees). 

• Local Taxes: While Mississippi doesn’t have a general local income tax, some municipalities may impose specific fees or taxes.  

FICA and State Insurance Taxes 

• FICA (Federal Insurance Contributions Act) Taxes:  

• Social Security Tax: 6.2% of wages up to the annual wage base ($168,600 for 2024) 

• Medicare Tax: 1.45% of all wages (plus an additional 0.9% for high earners) 

• State Insurance Taxes: Mississippi doesn’t impose a separate insurance tax, but employers may pay unemployment insurance taxes, indirectly affecting overall compensation packages. 

Pre-Tax Deductions 

Pre-tax deductions can significantly reduce your taxable income: 

• Health Insurance Premiums: Contributions to employer-sponsored health plans are often deducted pre-tax. 

• Retirement Contributions: 401(k), 403(b), or similar qualified retirement plan contributions. 

• Flexible Spending Accounts (FSAs): For healthcare or dependent care expenses. 

• Health Savings Accounts (HSAs): For those with high-deductible health plans. 

Mississippi Tax Rates and Information 2024 

Mississippi offers several exemptions and deductions that can reduce your taxable income: 

• Personal Exemptions: 

• • Single: $6,000 

• • Married: $12,000 

• • Head of Household: $9,500 ($8,000+$1,500) 

• Standard Deductions: 

• • Single: $2,300 

• • Married: $4,600 

• • Head of Household: $3,400 

• Additional Exemptions: 

• • $1,500 for each dependent 

• • $1,500 for taxpayers or spouses over 65 

• • $1,500 for blind taxpayers or spouses 

Tax Withholding Calculation 

Employers in Mississippi use a specific formula to calculate state income tax withholding: 

• Adjust gross wages by subtracting pre-tax deductions. 

• Annualize the adjusted wages. 

• Apply standard deductions and exemptions. 

• Calculate tax on taxable income using the 4.70% rate on amounts over $10,000. 

• Divide the annual tax by the number of pay periods to determine per-paycheck withholding. 

Filing Requirements 

You’re required to file a Mississippi tax return if: 

• You have Mississippi income tax withheld from your wages. 

• You’re a non-resident or part-year resident with Mississippi-taxed income. 

• Your gross income exceeds the sum of your exemptions plus standard deduction. 

Understanding these key components of Mississippi’s tax system will help you stay equipped to plan your financial future in the Magnolia State. 

Mississippi’s Flat Tax System 

In 2024, Mississippi transitioned to a flat tax system for individual income tax.  

• Flat Tax Rate: 4.70% 

• Applies to: Taxable income over $10,000 

• Tax-Free Income: First $10,000 of taxable income 

This system is a departure from the previous graduated tax brackets, that benefited higher-income earners while simplifying tax calculations for all. 

Comparative Tax Information 

To provide context for Mississippi’s tax system, here’s a comprehensive table of tax rates and rankings: 

• Local Taxes: While Mississippi’s state-level taxes are straightforward, some municipalities may impose additional local taxes. 

• No Estate or Inheritance Tax: Mississippi does not impose estate or inheritance taxes, which can be beneficial for wealth transfer and estate planning. 

• Corporate Income Tax: Mississippi maintains a graduated corporate income tax system, with rates ranging from 4.0% to 5.0%, affecting businesses operating in the state. 

• Sales Tax: With a 7.00% state sales tax rate, Mississippi has one of the highest in the nation. However, the average local sales tax rate is relatively low at 0.06%. 

• Property Tax: The effective property tax rate of 0.70% on owner-occupied housing value is relatively moderate, ranking 32nd nationally. 

Mississippi’s Tax Climate 

Overall, Mississippi’s tax system ranks 20th on the 2024 State Business Tax Climate Index, indicating a relatively competitive tax environment. The move to a flat income tax rate, combined with moderate property taxes and no estate tax, contributes to this ranking. 

Median household income in Mississippi 

Understanding Mississippi’s median household income provides a crucial context for interpreting paycheck calculations and assessing the state’s overall economic health. This metric offers valuable insights into the financial well-being of typical Mississippi families and individuals. 

Current Median Household Income 

As of the most recent data available, Mississippi’s median household income stands at $44,966 annually. This figure places Mississippi’s at the bottom of state rankings for median household income, making it the only state with a median income below $50,000. 

Historical Context and Trends 

To fully appreciate Mississippi’s current economic situation, it’s essential to consider historical trends: 

• Long-term position: Mississippi has consistently ranked among the lowest states in median household income for several decades. 

• Recent changes: While specific year-over-year changes can fluctuate, Mississippi’s relative position compared to other states has remained fairly constant. 

• Impact of economic events: Like other states, Mississippi experienced economic challenges during the 2008 recession and the COVID-19 pandemic, influencing income levels. 

Factors Influencing Mississippi’s Median Income 

Several interconnected factors contribute to Mississippi’s low median household income: 

• Educational attainment: Only 86.8% of Mississippi residents have a high school diploma or higher, the third lowest rate in the nation. Less than a quarter hold a bachelor’s degree, limiting access to higher-paying jobs. 

• Economic structure: Mississippi’s economy relies heavily on sectors like agriculture, manufacturing, and service industries, which often offer lower wages compared to knowledge-based sectors. 

• Rural population: A significant portion of Mississippi’s population lives in rural areas, where job opportunities and wages tend to be lower. 

• Poverty rate: Mississippi has the nation’s highest poverty rate at 18.8%, meaning nearly a fifth of households struggle to meet basic needs. 

• Historical factors: Long-standing socioeconomic challenges, including racial disparities and limited investment in certain regions, continue to impact income levels. 

Comparison to National Figures 

To put Mississippi’s median household income in perspective: 

• National median: The U.S. median household income is $69,243, meaning Mississippi’s figure is about 35% lower than the national average. 

• Highest state comparison: Maryland, with the highest median household income at $90,203, has a figure more than double that of Mississippi. 

• Regional context: Even among Southern states, which generally have lower median incomes than the Northeast or West Coast, Mississippi ranks the lowest. 

Implications for Paycheck Calculations 

Mississippi’s low median household income has several implications for paycheck calculations: 

• Lower tax burdens: Due to lower incomes, many Mississippi residents may fall into lower tax brackets, potentially resulting in smaller withholdings. 

• Eligibility for assistance: More households may qualify for state and federal assistance programs, which can affect take-home pay and overall household budgets. 

• Cost of living adjustments: While incomes are low, Mississippi also has a lower cost of living compared to many states, which can partially offset the impact of lower wages. 

• Importance of accurate calculations: Given the tight budgets many Mississippi households face, accurate paycheck calculations are crucial for financial planning and stability. 

Understanding Mississippi’s median household income provides essential context for using our Mississippi Salary Paycheck Calculator. Whether you’re above or below the median, this information helps in making informed financial decisions in the Magnolia State. 

Mississippi Tax Brackets 2024 

As of 2024, Mississippi has implemented a significant change in its tax structure, moving from a graduated system to a flat tax rate. This shift simplifies calculations for both employers and employees while potentially altering the tax burden for many Mississippi residents. 

Wrapping It Up 

Mississippi’s tax landscape, like that of any state, can change. Our Mississippi Paycheck Calculator is regularly updated to reflect the latest tax rates and regulations, ensuring you always have access to the most current information. 

Our calculator is designed to provide highly accurate estimates of your take-home pay, empower you to make informed financial decisions and take complete control of your economic future in the Magnolia State. 

Take the guesswork out of your finances – try our Mississippi Paycheck Calculator today and gain clarity on your hard-earned money!