Financial planning in Wisconsin
Four brackets to 7.65%, Social Security untaxed, and from 2025 a $24,000-per-person retirement income subtraction at 67.
Direct answer
Wisconsin taxes income in four brackets from 3.50% to 7.65%, with the top rate starting at $323,290 for a single filer and $431,060 on a joint return for 2025. Social Security is not taxed, 30% of long-term capital gains is excluded, and beginning with tax year 2025 anyone 67 or older may subtract up to $24,000 of IRA and retirement-plan income a year, $48,000 for a couple who both qualify, with no income limit. There is no estate or inheritance tax. For a Milwaukee or Madison household the work is drawing retirement income steadily enough to use the new subtraction every year, and weighing it against the state credits a year's claim gives up.
Wisconsin tax treatment
Figures are for tax year 2025, each read from the source beside it. Thresholds and rates are revised regularly; confirm the current year before acting on any of them. What these rules change in a household’s plan, from the order accounts are drawn to the timing of Roth conversions, is set out in the retirement tax planning overview.
For 2025, single filers pay 3.50% on taxable income up to $14,680, 4.40% to $50,480, 5.30% to $323,290 and 7.65% above; joint filers pay 3.50% to $19,580, 4.40% to $67,300, 5.30% to $431,060 and 7.65% above. The brackets are indexed from tax year 2026, and the Department of Revenue had not yet published the 2026 table when this was written.
All Social Security benefits are subtracted. Beginning with tax year 2025, a taxpayer who is 67 by year-end may subtract up to $24,000 of payments from a qualified retirement plan or IRA, $48,000 on a joint return where both spouses qualify, with no income limit or phase-out; the Department of Revenue has confirmed that Roth-conversion income, required minimum distributions and inherited-IRA distributions can qualify. The trade-off: in a year the subtraction is claimed, no Wisconsin credit under s. 71.07 (the school property tax, married couple and itemized deduction credits among them) may be claimed, so the two have to be compared. The older $5,000 exclusion at 65 remains for households under $15,000 ($30,000 joint) of federal AGI.
Wisconsin has had no estate tax for deaths after December 31, 2007 and no inheritance tax for deaths on or after January 1, 1992. Only the federal exclusion applies.
Worth doing here
Things that are worth doing in Wisconsin that would not be worth doing, or would work differently, somewhere else.
The $24,000-per-person subtraction resets every year and has no income limit, so a couple both 67 or older can take up to $48,000 a year from IRAs and retirement plans free of Wisconsin tax, year after year, rather than in lumps. Conversion income qualifies. Run the year both ways, because claiming it forfeits the state's s. 71.07 credits for that year.
Wisconsin excludes 30% of net long-term capital gain (60% for farm assets) after netting the year's gains and losses, so the effective state rate on a large realized gain is well below the 7.65% headline. Depreciation recapture and other amounts taxed federally as ordinary income do not qualify.
Contributions to a Wisconsin college savings account can be subtracted up to $5,130 per beneficiary for 2025 ($2,560 if married filing separately), with amounts above the limit carried forward. The limit is per beneficiary, so a grandparent funding three accounts subtracts up to three times that.
Federal and state, together
At 5.30% on most of a working household's income and 7.65% at the top, Wisconsin income tax plus Milwaukee- or Madison-area property tax can approach the federal deduction cap, and above $500,000 of modified adjusted gross income the cap shrinks toward $10,000. In retirement the Social Security subtraction and the age-67 subtraction remove a good part of the state layer.
The federal deduction for state and local taxes is $40,400 for tax year 2026 and begins to shrink above $500,000 of modified adjusted gross income, down to a floor of $10,000, and is scheduled to return to $10,000 after 2029. The federal estate tax exclusion is $15,000,000 per person for deaths in 2026. IRS, Instructions for Schedule A (2025), line 5e; IRS, tax year 2026 inflation adjustments (Rev. Proc. 2025-32).
Cities
Each city page covers what is local — how households there tend to be paid, what the first meeting usually covers — and inherits this state layer.
Milwaukee's households are paid by manufacturing and industrial headquarters (Rockwell Automation and Harley-Davidson among them), by Northwestern Mutual and Fiserv, by ManpowerGroup, and by two large health systems and the Medical College of Wisconsin.
Madison is paid by the University of Wisconsin and UW Health, by state government, by American Family Insurance's headquarters, by the privately held Epic Systems in nearby Verona, and by a life-sciences sector that includes Exact Sciences.
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Common questions
No. All Social Security benefits are subtracted on the Wisconsin return.
Yes, at the graduated rates, but from tax year 2025 a taxpayer aged 67 or older can subtract up to $24,000 a year of retirement-plan and IRA income ($48,000 on a joint return where both qualify), with no income limit. Claiming it means forgoing the state's s. 71.07 credits for that year.
No. There has been no estate tax for deaths after 2007 and no inheritance tax for deaths since 1992.
No. Flames Financial Planning is based in Minnetonka, Minnesota, and serves Wisconsin households through a virtual planning relationship. This page describes the service area and does not claim a Wisconsin office.
Yes. State tax treatment shapes withdrawal order, Roth-conversion timing, and where investments are best held. Planning includes tax guidance and review of a completed return; Premier adds tax projections and preparation and filing through an independent tax partner.
Next step
A discovery meeting covers your situation, what you pay now, and whether a fixed quarterly membership is a better fit.
