10 Least Tax-Friendly States for Retirees, Some states offer attractive tax benefits to woo retirees.
Then there are these ten states that are stingy with tax breaks for retirees. Some don't offer any breaks on Social Security benefits -- a significant source of most retirees' income. Many of these states also have no special tax treatment for other types of retirement income. Others impose higher-than-average taxes across the board. And many have either an estate tax or inheritance tax.
Property taxes were also a factor. High property taxes are the single biggest reason retirees living on a fixed income decide to move elsewhere, says Tom Wetzel, president of RetirementLiving.com. John Brady, editor of TopRetirements.com, agrees: "The most significant tax threat to most retirees is the property tax because it is based on the value of your home and bears no direct relation to your income."Connecticut can be inhospitable to retirees, depending on their income level and where they earned their retirement benefits. Some residents of the Constitution State can exclude their Social Security benefits from state income taxes, but only if their adjusted gross income is less than $50,000 (less than $60,000 for married couples). All out-of-state government and civil-service retirement pensions are fully taxed, but half of military retirement pay is excluded from taxes. The statewide sales tax rate is 6.35%, with luxury items taxed at 7%. Connecticut residents pay the second-highest property taxes in the U.S., according to the Tax Foundation, but residents 65 and older may qualify for an annual property-tax credit or rent rebate.
Then there are these ten states that are stingy with tax breaks for retirees. Some don't offer any breaks on Social Security benefits -- a significant source of most retirees' income. Many of these states also have no special tax treatment for other types of retirement income. Others impose higher-than-average taxes across the board. And many have either an estate tax or inheritance tax.
Property taxes were also a factor. High property taxes are the single biggest reason retirees living on a fixed income decide to move elsewhere, says Tom Wetzel, president of RetirementLiving.com. John Brady, editor of TopRetirements.com, agrees: "The most significant tax threat to most retirees is the property tax because it is based on the value of your home and bears no direct relation to your income."Connecticut can be inhospitable to retirees, depending on their income level and where they earned their retirement benefits. Some residents of the Constitution State can exclude their Social Security benefits from state income taxes, but only if their adjusted gross income is less than $50,000 (less than $60,000 for married couples). All out-of-state government and civil-service retirement pensions are fully taxed, but half of military retirement pay is excluded from taxes. The statewide sales tax rate is 6.35%, with luxury items taxed at 7%. Connecticut residents pay the second-highest property taxes in the U.S., according to the Tax Foundation, but residents 65 and older may qualify for an annual property-tax credit or rent rebate.
0 comments:
Post a Comment