Best States For Retirement Taxes  

Relocation might become an important consideration once you are on the verge of your retirement. The reason could be because there are some states that would suit you best as far as the tax benefits on pension amount are considered.

At the first place it should be clear that there is no evasion from the federal income tax. There are of course states that do no charge income tax such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Some of them at times could be charging something called as intangible tax which is 1 to 2 percent on stocks and bonds. Other states like New Hampshire and Tennessee charge tax on interests and dividends. California, New York and Massachusetts are the states which have the record of highest tax rates. If one is residing in a state and receiving a pension which has been earned in another, it actually forbids the occupied state from taxing the same person. If the pension income is $20,000 in New York, it is not charged in the income tax.

The other few taxes whose rates varies in different states are he death taxes, property and gift taxes. In case of a death tax there are few states which ask for the estate tax and inheritance tax and few have pick up taxes. Death tax at a lower rate is usually seen in Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Maine, Minnesota, Missouri, Nevada, New Hampshire, New Mexico, North Dakota, Oregon, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. However, in New York the death tax rate shoots up to 21 percent.

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Best States For Retirement Taxes

Federal-Taxes-On-Retirement-Income      The income received as retirement benefit is taxable at ordinary rates. Therefore, it implies that the tax rate actually depends on the total earnings of that particular year no matter if it comes from pension or any other sources. Tax rates do not take into account the person’s age. IRS tax rates are applied in similar fashion to all the earning citizens. More..




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