(NEXSTAR) – Have you ever wondered what it takes to be rich in Texas? What about ultra-rich?
An analysis published earlier this year by SmartAsset showed how much income it takes to be in the top 1% in each of the 50 states.
Using tax data from the IRS, the site was able to determine the minimum income required to be among the highest earners in each state. These figures were then adjusted to 2021 dollars using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the Bureau of Labor Statistics.
In Texas, you’d need an adjusted gross income of at least $594,000 to be in the state’s top 1% of earners.
That’s not far off from the national average. In its analysis, SmartAsset found an American family needs a gross income of $597,815 to fall in the top 1% of earners nationally. Those in the top 1% in the U.S. earn twice as much as those in the top 5% – a gross income of $240,712 is enough to put you in the top 5%.
Adjusted gross income, or AGI, is your gross income minus some common adjustments – like student loan interest or teacher supply costs – to income, according to the IRS. Gross income includes wages, capital gains, retirement distribution, and any other income. Adjustments may include student loan interest, alimony payments, or contributions to a retirement account.
Your AGI is used to determine which credits and deductibles you qualify for while filing your taxes.
The benchmark to be considered among the top 1% of earners varies by location. The number is highest in Washington, D.C., where you need to make at least $918,000 to be in the top 1%.
Here are the five states with the highest adjusted gross incomes to be considered among the top 1%:
- Connecticut: $896,490
- Massachusetts: $810,256
- New York: $777,126
- New Jersey: $760,462
- California: $745,314
Alternatively, the five states with the lowest AGIs for the top 1% are:
- West Virginia: $350,212
- Mississippi: $361,462
- New Mexico: $384,427
- Arkansas: $411,633
- Kentucky: $412,836
Because SmartAsset’s calculations were based on consumer price figures from 2021, the income needed to be in a state’s top 1% is likely even higher now thanks to inflation.
U.S. inflation was up 8.2% in September when compared to the year before.
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