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The standard deduction is a specific dollar amount that reduces your taxable income. For the 2021 tax year, the standard deduction is $12,550 for single filers and married filing separately, $25,100 for joint filers and $18,800 for heads of household.
The most common itemized deductions are those for state and local taxes, mortgage interest, charitable contributions, and medical and dental expenses.
Montana law allows a federal income tax deduction of up to $5,000 (or $10,000 for MFJ). Taxpayers itemizing on the federal return receive the deduction for state income taxes paid. Montana allows an itemized deduction for medical insurance premiums and long-term care insurance premiums.
This reduction begins with the 2022 tax year. The highest tax rate will decrease from 6.9% to 6.75% on any taxable income over $19,800. Montana currently has seven marginal tax rates.
The overall tax burden-taking into account the various taxes levied by all levels of Montana government (state, counties, cities and towns, school districts, etc.) is the 14th lowest in the nation on a per capita basis and 13th lowest as a percentage of income.

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Income Tax Brackets All FilersMontana Taxable IncomeRate$11,300 - $14,5005.00%$14,500 - $18,7006.00%$18,700+6.90%4 more rows • Jan 1, 2021
Deductions you may be able to itemize include the following: Medical and dental expenses. Medical and long-term-care insurance premiums. Personal property taxes.
The first $3,100 you earn in taxable income is taxed at 1.00%. The rate jumps to 2.00% on income above $3,100 and up to $5,500; 3.00% on income up to $8,400; 4.00% up to $11,300; 5.00% up to $14,500; 6.00% up to $18,700; and 6.90% on taxable income over $18,700.
The 2022 tax rates themselves are the same as the rates in effect for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, as they are every year, the 2022 tax brackets were adjusted to account for inflation.
Montana has a graduated individual income tax, with rates ranging from 1.00 percent to 6.75 percent. Montana has a 6.75 percent corporate income tax rate. Montana does not have a state sales tax and does not levy local sales taxes. Montana's tax system ranks 5th overall on our 2022 State Business Tax Climate Index.

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