10 Least Tax-Friendly States for Retirees
10 Least Tax-Friendly States for Retirees
When you're living on a fixed income, every penny counts, which makes these states particularly unwelcoming for retirees. Most of these states tax at least a portion of your Social Security benefits. Some also have higher-than-average income taxes. Others make up for low income and sales taxes with high property taxes. "There's no such thing as a free lunch," says Tom Wetzel, president of the Retirement Living Information Center. Finally, some of these states continue to tax you beyond the grave with estate or inheritance taxes.
SOURCES: State tax departments, CCH and the Tax Foundation.
Read more at http://www.kiplinger.com/slideshow/retirement/T006-S001-10-least-tax-friendly-states-for-retirees/index.html?cid=32#seHDY72uxLKZZpSf.99
#10 New York
State Income Tax: 4% to 8.82% State Sales Tax: 4% Estate Tax/Inheritance Tax: Yes/No
Although the Empire State offers generous tax exemptions for retirees, the state has some of the highest property taxes in the U.S.
New York doesn't tax Social Security benefits or public pensions. There is also an exemption of up to $20,000 for private pensions, out-of-state government pensions, and distributions from IRAs and Keogh plans.
Food, prescription and nonprescription drugs, greens fees, health club memberships, and most arts and entertainment tickets are exempt from the state sales tax. Local taxing entities impose additional sales taxes ranging from 3% to 4.75%.
Real estate is taxed at the local level. New York has a property tax cap of 2% or the rate of inflation—whichever is lower—on increases in the amount of taxes collected by localities. Median property tax on a $306,000 median-valued home is $3,755, according to the Tax Foundation. Seniors age 65 and older with income of $81,900 or less are eligible to exempt up to $63,300 of the value of their homes from school property taxes.
Estates exceeding $1 million are subject to estate tax, with a top rate of 16%. Assets left to a spouse are exempt.
http://www.kiplinger.com/slideshow/retirement/T006-S001-10-least-tax-friendly-states-for-retirees/index.html?cid=32
10 Least Tax-Friendly States for Retirees
#10 New York
Although the Empire State offers generous tax exemptions for retirees, the state has some of the highest property taxes in the U.S.
New York doesn't tax Social Security benefits or public pensions. There is also an exemption of up to $20,000 for private pensions, out-of-state government pensions, and distributions from IRAs and Keogh plans.
Food, prescription and nonprescription drugs, greens fees, health club memberships, and most arts and entertainment tickets are exempt from the state sales tax. Local taxing entities impose additional sales taxes ranging from 3% to 4.75%.
Real estate is taxed at the local level. New York has a property tax cap of 2% or the rate of inflation—whichever is lower—on increases in the amount of taxes collected by localities. Median property tax on a $306,000 median-valued home is $3,755, according to the Tax Foundation. Seniors age 65 and older with income of $81,900 or less are eligible to exempt up to $63,300 of the value of their homes from school property taxes.
Estates exceeding $1 million are subject to estate tax, with a top rate of 16%. Assets left to a spouse are exempt.
Read more at http://www.kiplinger.com/slideshow/retirement/T006-S001-10-least-tax-friendly-states-for-retirees/index.html?cid=32#seHDY72uxLKZZpSf.99
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