Iowa vs Tennessee: Tax Impact on Your Salary
VSDetailed comparison of tax rates, cost of living, and quality of life
📌 At $100,000, the difference between Iowa's 8.53% and Tennessee's no income tax comes to roughly $8,530 per year. Tennessee makes up ground with no income tax, which draws considerable interest from retirees. While families tend to favor Tennessee for the tax break, the decision hinges on how much weight you put on climate.
Iowa and Tennessee differ notably on income tax: 8.53% versus no income tax. The practical impact at $100,000 runs about $8,530 per year. Most people considering a move look at this alongside cost of living, job market, and lifestyle factors.
🔑 Key Differences
- **State income tax**: Iowa at 8.53% vs Tennessee at no income tax
- **Annual savings** (on $100,000): Tennessee saves you ~$8,530
- **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 | Tennessee |
|---|---|---|
| State Income Tax | 0.33% - 8.53% | No Income Tax Winner |
| 💰 On $40,000 Salary |
State Tax: $1,772
Take Home: $38,228
|
State Tax: $0
Take Home: $40,000
+$1,772
|
| 💰 On $60,000 Salary |
State Tax: $2,658
Take Home: $57,342
|
State Tax: $0
Take Home: $60,000
+$2,658
|
| 💰 On $100,000 Salary |
State Tax: $4,430
Take Home: $95,570
|
State Tax: $0
Take Home: $100,000
+$4,430
|
| 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. | Tennessee costs vary by region. Nashville housing has appreciated substantially - median prices often exceed $400,000 in desirable areas. Memphis, Chattanooga, and Knoxville offer better value with homes typically $200,000-350,000. Smaller cities provide exceptional affordability. Sales tax reaches 9-10% in many areas. Property taxes moderate. The no-income-tax advantage creates real financial benefit despite high sales tax. |
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
Tennessee
✓ Advantages
- No state income tax on wages
- Lower cost of living than most states
- Growing job markets especially in Nashville
- No state estate or inheritance tax
- Mild climate in most areas
⚠ Considerations
- High sales tax (often 9-10% total)
- Limited public transportation outside cities
- Hot humid summers
- Some rural areas have limited opportunities
- Property taxes vary significantly by county
Bottom Line
Tennessee's no income tax versus Iowa's 8.53% translates to roughly $8,530 advantage at $100,000. Iowa stays relevant by offering no income tax. The decision often hinges on whether {factor} or direct tax savings carries more weight in your situation.📢 Share This Comparison
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