Taxes in Montana

The Tax Brackets and Rates in Montana 2015
Tax brackets in Montana are different from other states, such as they don’t provide couple filing jointly with expanded income tax brackets.  
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Tax bracket in Montana consist of starting at $0 and the highest bracket starts at 16,700. Here are a few examples of the tax bracket in Montana, say your earning tax bracket as an individual is between 10,100 and 12,999, your tax rate would be 5.00%. On the other hand if you’re earning tax bracket is 16,700+, your tax rate will be 6.90%. Montana collects a state income tax at a maximum marginal tax rate, which is the first highest in the United States.

Montana’s corporate income tax is a business tax levied on the gross taxable income of most businesses and corporations registered or doing business in Montana. The Montana corporate income tax is the business equivalent of the Montana personal income tax, and is based on a bracketed tax system. Similar to the personal income tax, businesses must file a yearly tax return and are allowed deductions such as wages paid, cost of goods sold, and other qualifying business expenses.

taxes montana

Montana Corporate Income Tax Comparison:

  • A home business grossing $55,000 a year pays $3,712.50 in taxes.
  • A small business earning $500,000 a year pays $3,375.00 in taxes.
  • A corporation earning $10,000,000 a year pays $675,000.00 in taxes.

In addition to the Montana corporate income tax, Montana corporations are required also to pay the federal corporate income tax. Like the personal income tax the federal business tax is bracketed based on income level, with eight corporate tax brackets.

The federal corporate tax’s brackets are not the same as the personal income tax. The brackets are not completely progressive and the last tax bracket is not the highest. This permits the corporate tax burden to be applied more equally among companies with several revenue levels. The federal income tax brackets are updated yearly for inflation purposes.  All Montana state taxes are deductible from gross income when calculating federal taxes, so any Montana corporate income tax paid can be deducted from a business’ gross taxable income before calculating your federal taxable income.

Companies that have been actively bringing in a substantial income, during the tax year of 2014 must file by mid-April 2015. Just the same, if you live in Montana all individuals that have earned an income must file an income tax return. On the other hand you as a business or an individual are entitled to deduction that may pertain to your business or job. One main thing to remember when filing your income tax for your business or as an individual, is that you have all your information correct without leaving anything out, because you never know when you could be audited.