Iowa vs Ohio: Which State Keeps More Money in Your Pocket?
VSDetailed comparison of tax rates, cost of living, and quality of life
📌 The math works out to around $3,859 yearly at $85,000 when comparing 8.53% versus 3.99%. Ohio offsets higher taxes through affordability. For families, Ohio presents clear savings. For middle class, Iowa's strengths in affordability often justify the cost difference.
The spread between Iowa (8.53%) and Ohio (3.99%) creates noticeable paycheck differences. At $85,000, you're facing roughly $3,859 in annual tax variance. How much that matters depends on your broader financial picture.
🔑 Key Differences
- **State income tax**: Iowa at 8.53% vs Ohio at 3.99%
- **Annual savings** (on $85,000): Ohio saves you ~$3,859
- **Tax system**: Both use progressive brackets
- **Deductions**: Standard federal deductions apply, state variations exist
- **Local taxes**: Check your specific county/city as rates vary within states
Tax Comparison
| Tax Type | Iowa | Ohio |
|---|---|---|
| State Income Tax | 0.33% - 8.53% | 0% - 3.99% |
| 💰 On $40,000 Salary |
State Tax: $1,772
Take Home: $38,228
|
State Tax: $798
Take Home: $39,202
+$974
|
| 💰 On $60,000 Salary |
State Tax: $2,658
Take Home: $57,342
|
State Tax: $1,197
Take Home: $58,803
+$1,461
|
| 💰 On $100,000 Salary |
State Tax: $4,430
Take Home: $95,570
|
State Tax: $1,995
Take Home: $98,005
+$2,435
|
| Cost of Living | Iowa consistently ranks among America's most affordable states. Des Moines and Cedar Rapids offer genuine metropolitan amenities - professional sports, cultural institutions, quality restaurants - while maintaining housing costs 50-60% below expensive coastal markets. Quality homes in good neighborhoods typically sell for $200,000-300,000. Iowa City combines college town atmosphere with reasonable prices. Smaller cities throughout Iowa provide even greater value. Property taxes vary by locality but generally stay moderate. Groceries, utilities, and services all cost less than national averages. The affordability advantage means even moderate incomes support comfortable, middle-class lifestyles. | Ohio ranks among America's more affordable states. Cleveland, Columbus, and Cincinnati offer genuine metropolitan amenities with housing costs 40-50% below similar-sized coastal cities. Quality homes in good suburbs typically sell for $200,000-300,000. Smaller Ohio cities provide even better value. Property taxes vary by locality but generally stay moderate. Groceries, utilities, and services all cost substantially less than national averages. The affordability means moderate salaries support comfortable middle-class lifestyles. |
Pros & Cons
Iowa
✓ Advantages
- Low cost of living statewide
- Extremely affordable housing
- Strong agriculture and insurance sectors
- Good education systems
- Friendly communities
⚠ Considerations
- Cold winters
- Limited metro areas
- Population decline in rural areas
- Lower average salaries
- Limited public transportation
Ohio
✓ Advantages
- Moderate state income tax tops out at 3.75%
- Affordable cost of living across the state
- Strong healthcare and manufacturing sectors
- Major metro areas offer urban amenities at reasonable costs
- Central location provides access to other regional markets
⚠ Considerations
- Some cities impose local income taxes on top of state tax
- Cold winters with heating expenses
- Some industrial areas face economic challenges
- Public transportation limited outside Cleveland
- Brain drain as young professionals leave for coastal opportunities
Bottom Line
Ohio saves you roughly $3,859 annually at $85,000, which adds up over time. Iowa keeps drawing people despite the tax premium, largely due to affordability. You'll find families gravitating toward Ohio, while middle class often decide Iowa's advantages justify the cost.📢 Share This Comparison
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