10 Most Tax-Friendly States

As someone who works and pay taxes in the U.S., it would be wise to know which states offer the most friendly tax policy to their residents and investors. Tax expenses is one of the highest expenses of one’s life time. By carefully selecting the state(s) where you will live and invest can be the difference between getting rich, and going poor. The below 10 states are the most tax-friendly!

#1 Alaska

State Income Tax: None
State Sales Tax: None
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the state’s median home value of $254,000 is $3,008.
  • Sends all permanent residents (those who have lived there for at least one year) an annual dividend check from the state’s oil wealth savings account. For 2014, the dividend was $1,884 — or more than $7,500 for a family of four.
  • Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of assessed value of their property.

#2 Wyoming

State Income Tax: None
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the state’s median home value of $195,500 is $1,195, the eighth-lowest in the U.S.

#3 Nevada

State Income Tax: None
State Sales Tax: 6.85%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the state’s median home value of $165,300 is $1,423.

#4 Mississippi

State Income Tax: 3% (on income up to $5,000) to 5% (on income of more than $10,000)
State Sales Tax: 7%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the median home value of $97,500 is $778, the 17th-lowest in the nation.
  • Mississippi not only exempts Social Security benefits from state income taxes, it also excludes withdrawals from IRAs and 401(k) plans, income from public and private pensions, and other types of qualified retirement income.

#5 Georgia

State Income Tax: 1% (on income up to $750/individual, $1,000/joint) – 6% (on income over $7,000 individual, $10,000/joint)
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the state’s median home value of $141,600 is $1,352.
  • Social Security income is exempt from state taxes, and so is as much as $35,000 of most types of retirement income for people ages 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer, or $130,000 per couple. Retirement income includes interest, dividends, net income from rental property, capital gains, royalties, pensions, annuities and the first $4,000 of earned income, such as wages.

#6 Delaware

State Income Tax: 2.2% (on income from $2,001 to $5,000) to 6.6% (on income of more than $60,000)
State Sales Tax: None
Estate Tax/Inheritance Tax: Yes/No

  • Delaware has the fourth-lowest property taxes in the U.S., according to the Tax Foundation. Median property tax on the median home value of $226,200 is $1,240.

#7 Arizona

State Income Tax: 2.59% (on income up to $10,000/individual, $20,000/joint) to 4.54% (on income of more than $150,000/individual, $300,000/joint)
State Sales Tax: 5.6%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the state’s median home value of $166,000 is $1,321, the 16th-lowest in the U.S.
  • Social Security benefits are exempt from state tax.

#8 Louisiana

State Income Tax: 2% (on income up to $12,500/individual, $25,000/joint) to 6% (on taxable income of more than $50,000/individual, $100,000/joint)
State Sales Tax: 8.9% (state + local)
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the median home value of $140,300 is $714, the third-lowest rate in the U.S.

#9 South Dakota

State Income Tax: None
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the median home value of $138,400 is $1,828, the 16th-highest rate in the U.S.

#10 Florida

State Income Tax: None
State Sales Tax: 6%
Estate Tax/Inheritance Tax: No/No

  • The median property tax on the median home value of $153,300 is $1,623.
    Residents are eligible for a homestead exemption of as much as $50,000.

Source: http://content.kiplinger.com/slideshow/retirement/T055-S001-top-15-most-tax-friendly-states-for-retirees/index.html

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