Houston ranked among cities where $250K goes the furthest
HOUSTON - As your income goes up, so will your tax rates. In 2024, a $250,000 income makes a single tax filer into the 35% federal income tax bracket. On top of that, you may need to factor in state and city taxes. And, depending on where you live, the cost of living could also take a bigger bite out of the value of your dollar.
To find where high earners retain more of their income, SmartAsset adjusted a $250,000 income for federal, state and local taxes, as well as varying costs of living for 72 of the largest U.S. cities.
Key findings
$100k of a $250K income goes to taxes in Baltimore. The tax rate at this income level is 38.9%, the highest across major U.S. cities. The cost of living reflects the U.S. average, so the post-tax paycheck is true to its purchasing power.
El Paso residents retain over $200K of value. Despite a 27.4% tax rate taking the annual pay down to just over $180,000, the costs in El Paso help make up the difference. Prices for necessities are roughly 12% more affordable than the U.S. average.
Manhattan residents lose 72% of their income to taxes and cost of living. At the $250K income level, Manhattanites face a 36.8% tax rate. Adjusting for a cost of living that's 125% higher than average, the income yields an estimated $70,133 of purchasing power.
Among places with no income tax, Seattle has the highest cost of living. Washington is one out of nine states that don't impose income tax, leaving Seattleites with one of the lowest aggregate tax rates at 27.4% for a $250K income. But the cost of living is 44% higher than average, meaning the income effectively yields $125,481.
Where a $250K income goes furthest (and the least)
Cities are ranked by the purchasing power of $250K after accounting for federal, state and local taxes as well as cost of living premiums relative to the U.S. average.
Top 10 places where $250K is worth the most
1. El Paso, Texas
El Paso has a cost of living 12.1% below average and a tax rate of 27.4% for a $250,000 income. This yields an adjusted purchasing power of $206,423, which is 82.6% of its original value.
2. Memphis, Tennessee
The cost of living in Memphis is 10.2% lower than average. With a tax rate of 27.4% at the $250,000 income level, the annual pay is equal to $202,056 in purchasing power, or 80.8% of its face value.
3. Corpus Christi, Texas
In Corpus Christi, a $250,000 income is worth $200,715 after adjusting for a 9.6% lower cost of living and a tax rate of 27.4%. High earners here preserve 80.3% of their original income value.
4. Oklahoma City, Oklahoma
In Oklahoma City, the cost of living is 14.9% below average, with a tax rate of 31.7% on $250,000. This adjusts the income's purchasing power to $200,665, or 80.3% of the initial income.
5. San Antonio, Texas
A $250,000 income in San Antonio adjusts to $198,954 after adjusting for an 8.8% cost of living that's lower than average and a tax rate of 27.4%. High earners here maintain 79.6% of their original income's value.
6. Lubbock, Texas
Lubbock has an 8.2% advantage when it comes to cost of living, and a tax rate of 27.4% on $250,000. This yields a purchasing power of $197,654, or 79.1% of the original value.
7. Jacksonville, Florida
After adjusting for a cost of living that is 6.9% lower than average and a tax rate of 27.4%, high earners in Jacksonville making $250,000 take home $194,894. This is 78% of the original value.
8. Tulsa, Oklahoma
Tulsa has a cost of living that is 11.8% lower than average and a tax rate of 31.7% for $250,000. This yields an adjusted purchasing power of $193,612, which is 77.4% of its original value.
9. Houston, Texas
PEARLAND, TEXAS - SEPTEMBER 15: In an aerial view, homes are seen in a residential neighborhood on September 15, 2022 in Pearland, Texas. Mortgage rates continue climbing around the country reaching 6 percent this week, for the first time since the 2
Houston's cost of living is 5.9% less expensive than average. And with a tax rate of 27.4% at $250,000l, this income effectively adjusts to $192,823 in purchasing power, or 77.1% of the original value.
10. Nashville, Tennessee
Nashville, with a cost of living that is 4.1% below average and a tax rate of 27.4%, offers an adjusted purchasing power of $189,203 for a $250,000 income. This allows high earners to retain 75.7% of their original income.
Top 10 places where $250K is worth the least
1. Manhattan, New York
The cost of living in Manhattan is 125.2% above average, with a tax rate of 36.8% at the $250,000 income level in 2023. This reduces to an adjusted purchasing power of $70,133, retaining only 28.1% of its original value.
2. Honolulu, Hawaii
Honolulu's high cost of living is 80.3% above average, along with a tax rate of 36.1% on $250,000. This yields $88,551 in purchasing power, preserving only 35.4% of the face value.
3. San Francisco, California
San Francisco has a cost of living 70% above average and a tax rate of 37.9%. This leaves a $250,000 income with an adjusted purchasing power of $91,356.
4. Brooklyn, New York
In Brooklyn, the cost of living is 60.5% above average and the tax rate is 36.8%. As a result, a $250,000 income's value drops to $98,404, or 39.4% of its original worth.
5. Los Angeles, California
The cost of living in Los Angeles is 48.9% above average. And with a tax rate of 36.4%, the purchasing power of a $250,000 income falls to $106,768, which is 42.7% of the original value.
6. Washington, DC
In DC, a $250,000 income is worth $110,455. After adjusting for a 46.8% higher cost of living and a 35.1% tax rate, that income will retain 44.2% of its value.
7. San Diego, California
San Diego's cost of living is 42% above average, with a tax rate of 36.4% at the $250,000 level. This reduces that income to an adjusted purchasing power of $111,956, or 44.8% of its original value.
8. Queens, New York
Queens has a 39.3% higher cost of living and a 36.8% tax rate on $250,000.This brings that income down to an adjusted purchasing power of $113,380, or 45.4% of its nominal value.
9. Oakland, California
With a cost of living 38.8% above average and a tax rate of 36.4%, a $250,000 income in Oakland yields $114,537 in purchasing power, which is 45.8% of the original value.
10. Boston, Massachusetts
Boston has a 46.5% higher cost of living and a tax rate of 32.3% for $250,000. This is an adjusted purchasing power of $115,540, which retains 46.2% of its original worth.
Data and methodology
This study used SmartAsset's paycheck calculator to apply federal, state and local taxes to an annual salary of $100,000 for an individual. This online tool calculates your take-home pay per paycheck for both salary and hourly jobs after taking into account federal, state and local taxes. We then adjusted the remaining amount for the local cost of living in 72 of the largest cities in the U.S. using data from the Council for Community and Economic Research. The cost of living takes into account the price of housing, groceries, utilities, transportation, and miscellaneous goods and services. Cost of living index data is averaged across 2023.
This story was produced by SmartAsset and reviewed and distributed by Stacker Media.