Pay attention to Social Security and other income amounts. If you only have income from Social Security benefits during retirement, then you won't include those benefits in your gross income. In this case, your gross income will be zero and you won't have to file a federal income tax return. The Great Lakes state tends to collect more state and local taxes from retirees than many other states, thanks in large part to property taxes being above average.
Utah offers a small retirement tax credit that can help offset Social Security tax, but it's only available to certain seniors who meet income requirements. Older adults and retirees can take advantage of tax breaks and additional savings when it's time to file their taxes. Understanding how taxes will affect your retirement income can help you consider ways to minimize your tax bill and maximize your retirement income. If you're an older adult or a recent retiree, read on to learn about the tax breaks you can take advantage of this tax season.
So, if you're thinking about moving during your retirement, where do your current state and destination state fit when it comes to taxes? We ranked the 50 states, plus the District of Columbia, according to the taxes they pay to retirees. For retirees, Old Dominion offers some tax breaks here and there to create a favorable overall tax environment. The state of Tar Heel, a favorite of retirees moving from other states, doesn't tax Social Security benefits, but tax exemptions for other common types of retirement income are scarce (although government pensions are exempt under certain circumstances). Tax Exemptions If you didn't receive a third stimulus check last year, or didn't receive the full amount, you may be able to collect it when you file your tax return this year.
In addition, income tax rates are so low that most North Dakota retirees still don't receive outrageous income tax bills, even if they have taxable income. The information contained here is general and educational in nature and should not be considered legal or tax advice. Granite State residents don't pay taxes on Social Security benefits, pensions, or distributions from their retirement plans because there is no general income tax. Property taxes are significantly below the national average (the third lowest average property tax rate in the country).
The Empire State's overwhelming tax burden extends to retirement, especially when it comes to property taxes. However, in most cases, other retirement income is taxable and Oregon's income tax rates can reach 9.9%. Oregon doesn't tax Social Security benefits, which certainly helps retirees lower their income tax bill.