Taxes in Ann Arbor, Michigan
Complete tax guide for Ann Arbor, MI. State income tax up to 4.25%, 1.91% property tax, 6% sales tax. Calculate your total tax burden.
State Income Tax
4.25%
Michigan
Property Tax
1.91%
Effective rate
Sales Tax
6%
Combined rate
Tax Burden
Very High
Ann Arbor, MI Tax Overview
University of Michigan; high property taxes
Population
123,851
Median Income
$65,745
Cost of Living
112.3 (100 = avg)
State Income Tax
4.25%
Median Home Price
$395,000
Ann Arbor Tax Calculator
Pre-filled with Ann Arbor median: $65,745
Total Tax Burden in Ann Arbor
$13,902
Take-Home: $51,843 · Effective Rate: 21.14%
Federal Tax
$6,078
9.24% eff.
MI State
$2,794
4.25% eff.
FICA
$5,029
7.65% eff.
Take-Home
$51,843
78.86% kept
Tax Breakdown
| Item | Annual | Monthly |
|---|---|---|
| Gross Income | $65,745.00 | $5,478.75 |
| Federal Income Tax | -$6,077.90 | -$506.49 |
| Michigan State Tax | -$2,794.16 | -$232.85 |
| Social Security (6.2%) | -$4,076.19 | -$339.68 |
| Medicare (1.45%) | -$953.30 | -$79.44 |
| Take-Home Pay | $51,843.45 | $4,320.29 |
Property Tax in Ann Arbor
Median Home
$395,000
Annual Tax
$7,545
Monthly Tax
$629
Effective Rate
1.91%
Sales Tax in Ann Arbor
Combined Rate
6%
State Portion
~3.5%
Local Portion
~2.5%
The combined sales tax rate in Ann Arbor is 6%, which is below the national average of 7.12%. On a $100 purchase, you would pay $6.00 in sales tax.
Tax Burden Comparison
| Tax Type | Ann Arbor | Michigan Avg | National Avg |
|---|---|---|---|
| Income Tax | 4.25% | 4.25% | 4.6% |
| Property Tax | 1.91% | ~1.91% | 1.1% |
| Sales Tax | 6% | ~6% | 7.12% |
| Overall Burden | Very High | — | Moderate |
Tax Saving Tips for Ann Arbor Residents
- Michigan's income tax rate of 4.25% is competitive. You may still benefit from maximizing 401(k) contributions ($23,500 limit) to reduce your taxable income at both state and federal levels.
- Property tax in Ann Arbor (1.91%) is above the national average. Check if you qualify for homestead exemptions or assessment appeals to reduce your property tax bill.
- Use a Health Savings Account (HSA) if eligible. Contributions are tax-deductible ($4,300 individual, $8,550 family), growth is tax-free, and withdrawals for medical expenses are tax-free.
Other Cities in Michigan
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Very LowCalculate Your Full Michigan Tax Burden
See detailed state tax brackets, FICA breakdown, and compare to neighboring states.
Frequently Asked Questions
What are the tax rates in Ann Arbor, MI?
Ann Arbor, Michigan has a state income tax rate up to 4.25%. The property tax rate is 1.91% and the combined sales tax rate is 6%. University of Michigan; high property taxes
How much is property tax in Ann Arbor?
The effective property tax rate in Ann Arbor is 1.91%. On the median home price of $395,000, this equals approximately $7,545 per year or $629 per month. This is above the national average of 1.1%.
What is the sales tax rate in Ann Arbor?
The combined sales tax rate in Ann Arbor is 6%, which includes both state and local components. This is below the national average combined rate of approximately 7.12%.
How does Ann Arbor's tax burden compare to other cities?
Ann Arbor has a very high overall tax burden. The effective total tax rate for a median-income household is approximately 35.1%. The combination of 4.25% state income tax, 1.91% property tax, and 6% sales tax determines the total burden. Cost of living index is 112.3 (100 = national average).
Are there any local taxes in Ann Arbor?
Ann Arbor does not impose a separate local or city income tax. Residents pay the state income tax of 4.25%, federal income tax, and FICA (Social Security and Medicare). University of Michigan; high property taxes