Retiring soon? Here are 13 states in the US that don't enforce taxes on retirement, take a look
Even though you can retire from work, that does not necessarily mean you need not pay taxes after your retirement in certain states. Here's a look at 13 states where retirement income is not taxed.
You may have paid a substantial amount of taxes to the government during your professional life, but it does not mean that you will stop paying taxes once you retire. There are states that tax your retirement income, too, other than a few. Here's a look at some of the US regions that do not tax your retirement income.
Alaska, Florida, and Illinois, for starters
No one in Alaska pays state taxes, as the region does not levy an income tax. This clearly means that you will not be taxed for the retirement benefits received, including the likes of Social Security benefits, pension income, or 401(k) or IRA distributions, according to a USA Today report. However, local sales taxes in Alaska can reach as far as 8%, and therefore, you need to make your necessary calculations before making a move.
Florida comes next, with no state tax on 401(k), 403(b), or IRA distributions, pension distributions, and more. Even for estate or inheritance tax, as well as for essential products like groceries, Florida does not issue any kind of state tax, which is a major relief for the residents. However, public transportation issues and rising insurance rates in the region could be a major problem there.
Illinois has a reasonable taxation rate of 4.95 per cent on income, but the best part is that it does not levy any taxes on retirement income.
Other states that don't tax retirement income
Some other states in the US that do not tax your retirement income include the likes of Iowa, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming. These are tax-friendly states in the overall aspect, with great advantages for retirees.
Among these, New Hampshire is one of the notable ones as it doesn't levy regular income tax. This means you won't owe taxes on Social Security benefits, pensions, or IRA and 401(k). Moreover, New Hampshire is one of the few states with no sales tax, as per the latest updates.
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