Wednesday, August 28, 2013
As I have previously discussed, there are many state tax factors to consider before choosing a retirement destination. Besides the obvious state income tax, here are five other tax factors to consider:
- Retirement-plan distributions. Most states exempt a portion of pension income from taxation, but will often treat public and private pensions in different ways.
- Social Security benefits. Fourteen states still tax them to some extent.
- Sales taxes. State and local sales taxes need to be included in every personal budget analysis. Some states exempt certain items while others have no sales tax at all.
- Property taxes. Check local jurisdictions to see how they generate property-tax bills.
- Estate and inheritance taxes. Some states require estates or heirs to pay taxes in addition to federal estate taxes.
See Editors of Kiplinger’s Retirement Report, 6 Tax Factors to Consider when Picking a Retirement Destination, Kiplinger, Aug. 21, 2013.