Taxpayers who don’t itemize their deductions can claim North Carolina’s standard deduction. Most other deductions that were previously available in North Carolina, including the Net Business Income deduction and the College Savings Program deduction, are no longer available as of 2014. The deductions for the latter two categories cannot exceed $20,000. In North Carolina, taxpayers can claim itemized deductions for charitable contributions, mortgage interest and property taxes. That rate applies to taxable income, which is income minus all qualifying deductions and exemptions, as well as any contributions to a retirement plan like a 401(k) or an IRA. For tax year 2021, all taxpayers pay a flat rate of 5.25%. North Carolina moved to a flat income tax beginning with tax year 2014.

Financial advisors can also help with investing and financial planning - including retirement, homeownership, insurance and more - to make sure you are preparing for the future. North Carolina’s estate tax was repealed as part of the 2013 law.Ī financial advisor in North Carolina can help you understand how taxes fit into your overall financial goals. The effect was a significant overall reduction in taxes for taxpayers of all income levels.Īlong with the state income tax, other taxes paid by North Carolinians include sales taxes (to both state and local authorities), property taxes and a gas tax. The new law introduced a flat rate income tax and more than doubled the standard deduction for North Carolina taxpayers. Previously, North Carolina had a progressive income tax, with rates ranging from 6% to 7.75%. In 2013, the North Carolina Tax Simplification and Reduction Act radically changed the state’s tax structure. Gas tax: 36.10 cents per gallon both of regular gasoline and diesel.Property tax: 0.77% average effective rate.

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