Taxes in Potomac, Maryland
Complete tax guide for Potomac, MD. State income tax up to 5.75%, 1.1% property tax, 6.42% sales tax. Calculate your total tax burden.
State Income Tax
5.75%
Maryland
Property Tax
1.1%
Effective rate
Sales Tax
6.42%
Combined rate
Tax Burden
High
Potomac, MD Tax Overview
Population
46,256
Median Income
$81,700
Cost of Living
110.3 (100 = avg)
State Income Tax
5.75%
Local Income Tax
3%
Median Home Price
$342,000
Potomac Tax Calculator
Pre-filled with Potomac median: $81,700
Total Tax Burden in Potomac
$22,987
Take-Home: $58,713 · Effective Rate: 28.14%
Federal Tax
$9,588
11.74% eff.
MD State + Local
$7,149
8.75% eff.
FICA
$6,250
7.65% eff.
Take-Home
$58,713
71.86% kept
Tax Breakdown
| Item | Annual | Monthly |
|---|---|---|
| Gross Income | $81,700.00 | $6,808.33 |
| Federal Income Tax | -$9,588.00 | -$799.00 |
| Maryland State Tax | -$4,697.75 | -$391.48 |
| Potomac Local Tax (3%) | -$2,451.00 | -$204.25 |
| Social Security (6.2%) | -$5,065.40 | -$422.12 |
| Medicare (1.45%) | -$1,184.65 | -$98.72 |
| Take-Home Pay | $58,713.20 | $4,892.77 |
Property Tax in Potomac
Median Home
$342,000
Annual Tax
$3,762
Monthly Tax
$314
Effective Rate
1.1%
Sales Tax in Potomac
Combined Rate
6.42%
State Portion
~3.9%
Local Portion
~2.5%
The combined sales tax rate in Potomac is 6.42%, which is below the national average of 7.12%. On a $100 purchase, you would pay $6.42 in sales tax.
Tax Burden Comparison
| Tax Type | Potomac | Maryland Avg | National Avg |
|---|---|---|---|
| Income Tax | 5.75% + 3% | 5.75% | 4.6% |
| Property Tax | 1.1% | ~1.1% | 1.1% |
| Sales Tax | 6.42% | ~6.42% | 7.12% |
| Overall Burden | High | — | Moderate |
Tax Saving Tips for Potomac Residents
- Maryland's income tax rate of 5.75% is above average. Maximize pre-tax retirement contributions (401k up to $23,500, IRA up to $7,000) to reduce both federal and state taxable income.
- Potomac has a local income tax of 3%. 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 Potomac (1.1%) 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 Maryland
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HighCalculate Your Full Maryland Tax Burden
See detailed state tax brackets, FICA breakdown, and compare to neighboring states.
Frequently Asked Questions
What are the tax rates in Potomac, MD?
Potomac, Maryland has a state income tax rate up to 5.75%, plus a local income tax of 3%. The property tax rate is 1.1% and the combined sales tax rate is 6.42%.
How much is property tax in Potomac?
The effective property tax rate in Potomac is 1.1%. On the median home price of $342,000, this equals approximately $3,762 per year or $314 per month. This is above the national average of 1.1%.
What is the sales tax rate in Potomac?
The combined sales tax rate in Potomac is 6.42%, which includes both state and local components. This is below the national average combined rate of approximately 7.12%.
How does Potomac's tax burden compare to other cities?
Potomac has a high overall tax burden. The effective total tax rate for a median-income household is approximately 30.5%. The combination of 5.75% state income tax, 1.1% property tax, and 6.42% sales tax determines the total burden. Cost of living index is 110.3 (100 = national average).
Are there any local taxes in Potomac?
Yes. Potomac imposes a local income tax of 3% in addition to the state income tax of 5.75%.