Flat-Fee Tax Preparation for Washington State Residents

Washington has no personal income tax, but enacted a 7% capital gains tax in 2022 on long-term capital gains over $262,000 (single) for most assets, excluding real estate

The WA capital gains tax specifically exempts gains from the sale of real estate — so WA real estate investors do not owe WA capital gains tax on property sales

Washington's Business & Occupation (B&O) tax is a gross receipts-style tax on business revenues — rates vary by business classification from 0.13% to 3.3%

WA state sales tax is 6.5% state plus local rates up to 4%, for potential combined rates of 10.4% in Seattle area

Washington imposes an estate tax on estates over $2.193M with rates up to 20% — one of the highest estate tax rates in the US

WA real estate excise tax (REET) is graduated: 1.1% on amounts under $525,000, rising to 3% on amounts over $3.025M — a significant transactional cost for higher-value properties

Seattle imposes additional business taxes and a payroll expense tax (JumpStart Seattle) on businesses with annual payroll over $7M and employees earning over $150,000

WA does not conform to federal bonus depreciation for B&O tax purposes — but since there is no WA income tax, federal depreciation elections apply only for federal purposes

Washington Real Estate Tax

Washington State — particularly Seattle and the Eastside — is one of the most valuable real estate markets in the US. The REET graduated rate creates a significant transactional cost on higher-value sales, and the WA estate tax at $2.193M affects many Seattle-area homeowners with appreciated property. The capital gains tax exemption for real estate is a major benefit for WA real estate investors.

Washington Business Tax

WA businesses face the B&O tax on gross revenues — a significant compliance obligation for all WA businesses regardless of profitability. The $2.193M estate tax threshold creates succession planning urgency for WA business owners. Seattle's JumpStart payroll tax affects larger employers. Federal tax optimization is the primary individual planning focus given no income tax.

Does Washington State have an income tax?

Washington does not impose a traditional personal income tax on wages, salaries, or most investment income. However, WA enacted a 7% capital gains tax in 2022 that applies to long-term capital gains from the sale of stocks, bonds, and certain other assets above $262,000 (single) annually. Real estate gains are specifically exempt from the WA capital gains tax — a significant distinction for real estate investors.

Does the Washington capital gains tax apply to my real estate sales?

No. The Washington capital gains tax explicitly exempts gains from the sale of real estate. If you sell WA real property (residential, commercial, or rental), the gain is not subject to the WA capital gains tax. Federal capital gains tax applies in full. This means WA real estate investors have no state-level capital gains tax on property dispositions — a significant benefit compared to states like OR or CA.

What is Washington's estate tax?

Washington imposes an estate tax on taxable estates over $2.193M (the threshold adjusts annually) with rates from 10% to 20% — the highest estate tax rate in the US. Seattle-area homeowners with appreciated real estate, retirement accounts, and investment portfolios can easily exceed the threshold. The estate tax is not portable between spouses, so each spouse has their own $2.193M exemption. WA estate planning is a high-priority issue for high-income Seattle residents.

What is the Washington B&O tax?

Washington's Business & Occupation tax is imposed on the gross receipts of virtually all businesses doing business in WA. Unlike an income tax, the B&O tax is owed even if the business is unprofitable. Tax rates vary by classification: service businesses pay 1.5%, retailers pay 0.471%, manufacturers pay 0.484%, and some professional services pay higher rates. All WA businesses must register with the WA Department of Revenue and file B&O tax returns.