Taxes in Indianapolis, Indiana
Complete tax guide for Indianapolis, IN. State income tax up to 3.05%, 0.86% property tax, 7% sales tax. Calculate your total tax burden.
State Income Tax
3.05%
Indiana
Property Tax
0.86%
Effective rate
Sales Tax
7%
Combined rate
Tax Burden
Low
Indianapolis, IN Tax Overview
Marion County local income tax rate of 2.02%; all Indiana counties levy local income tax
Population
887,642
Median Income
$55,416
Cost of Living
90.7 (100 = avg)
State Income Tax
3.05%
Local Income Tax
2.02%
Median Home Price
$205,000
Indianapolis Tax Calculator
Pre-filled with Indianapolis median: $55,416
Total Tax Burden in Indianapolis
$11,660
Take-Home: $43,756 · Effective Rate: 21.04%
Federal Tax
$4,611
8.32% eff.
IN State + Local
$2,810
5.07% eff.
FICA
$4,239
7.65% eff.
Take-Home
$43,756
78.96% kept
Tax Breakdown
| Item | Annual | Monthly |
|---|---|---|
| Gross Income | $55,416.00 | $4,618.00 |
| Federal Income Tax | -$4,611.42 | -$384.29 |
| Indiana State Tax | -$1,690.19 | -$140.85 |
| Indianapolis Local Tax (2.02%) | -$1,119.40 | -$93.28 |
| Social Security (6.2%) | -$3,435.79 | -$286.32 |
| Medicare (1.45%) | -$803.53 | -$66.96 |
| Take-Home Pay | $43,755.66 | $3,646.31 |
Property Tax in Indianapolis
Median Home
$205,000
Annual Tax
$1,763
Monthly Tax
$147
Effective Rate
0.86%
Sales Tax in Indianapolis
Combined Rate
7%
State Portion
~4.5%
Local Portion
~2.5%
The combined sales tax rate in Indianapolis is 7%, which is below the national average of 7.12%. On a $100 purchase, you would pay $7.00 in sales tax.
Tax Burden Comparison
| Tax Type | Indianapolis | Indiana Avg | National Avg |
|---|---|---|---|
| Income Tax | 3.05% + 2.02% | 3.05% | 4.6% |
| Property Tax | 0.86% | ~0.86% | 1.1% |
| Sales Tax | 7% | ~7% | 7.12% |
| Overall Burden | Low | — | Moderate |
Tax Saving Tips for Indianapolis Residents
- Indiana's income tax rate of 3.05% 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.
- Indianapolis has a local income tax of 2.02%. If you work remotely, verify whether you owe city tax based on where you work or where you live. Some cities only tax people who work within city limits.
- Property tax in Indianapolis (0.86%) is below the national average of 1.1%. This makes homeownership more affordable here relative to property tax burden.
- 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 Indiana
Calculate Your Full Indiana Tax Burden
See detailed state tax brackets, FICA breakdown, and compare to neighboring states.
Frequently Asked Questions
What are the tax rates in Indianapolis, IN?
Indianapolis, Indiana has a state income tax rate up to 3.05%, plus a local income tax of 2.02%. The property tax rate is 0.86% and the combined sales tax rate is 7%. Marion County local income tax rate of 2.02%; all Indiana counties levy local income tax
How much is property tax in Indianapolis?
The effective property tax rate in Indianapolis is 0.86%. On the median home price of $205,000, this equals approximately $1,763 per year or $147 per month. This is below the national average of 1.1%.
What is the sales tax rate in Indianapolis?
The combined sales tax rate in Indianapolis is 7%, which includes both state and local components. This is below the national average combined rate of approximately 7.12%.
How does Indianapolis's tax burden compare to other cities?
Indianapolis has a low overall tax burden. The effective total tax rate for a median-income household is approximately 26.3%. The combination of 3.05% state income tax, 0.86% property tax, and 7% sales tax determines the total burden. Cost of living index is 90.7 (100 = national average).
Are there any local taxes in Indianapolis?
Yes. Indianapolis imposes a local income tax of 2.02% in addition to the state income tax of 3.05%. Marion County local income tax rate of 2.02%; all Indiana counties levy local income tax