In the US, each state handles taxes differently. This means that the state you live in can impact your wallet positively or negatively after retirement. When you prepare your annual tax returns, you might wonder if living in your preferred is worth the tax. In this article, we’ll review the top tax-friendly states for African Americans to live in.
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One of the many sunbelt states on the list is Alabama. Retirees enjoy no state income tax on pension income and Social Security. Plus, the state has relatively low property tax.
As a black American, if you want to pass down a large estate, you should consider Alabama. The Cotton State has no inheritance or estate tax.
But you should keep in mind that the State taxes income from sources other than retirement. Plus, Cotton State has some of the highest sales tax rates in the United States. You can also get a few books on Amazon to learn more about tax-free retirement.
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Florida is a well-known state for retirees. The reason is that the Sunshine State has no income tax on any income and its median property taxes are very low. The best part is that long-time Florida residents can qualify for a large exemption.
Additionally, Florida has no estate or inheritance tax, making it favorable for heirs. Finally, it has low sales tax rates.
Like Alabama and Florida, Georgia has no tax on estate, Social Security, or inheritance tax. Its sales tax is low compared to that of Alabama. The Peach State’s property tax is also low.
While the state taxes other sources of income, it allows people aged 65 and above to deduct up to $65,000 in retirement income per individual from their taxes. Here are guides on Amazon to learn about new retirement savings.
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This is another tax-friendly state for retirees. The Magnolia State is probably one of the most tax-friendly states to recommend to African American retirees.
Mississippi has low property values and a relatively low property tax rate. The state also exempts pensions, Social Security, 401(k) distributions, and the Inland Revenue Authority of Singapore (IRAS) from its income tax.
Like Alabama, Florida, and Georgia, it has no inheritance or estate taxes, which is news for heirs. But Mississippi isn’t too fair on non-retirees. It has a flat 5% tax rate on income from non-retirement sources that exceeds $10,000. Additionally, the state has a high sales tax rate that includes groceries and food.
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The Lone Star State in the US is gradually becoming tax-friendly for retirees. Texas has no income tax and no estate or inheritance tax.
The only drawback Texas has that might improve in the future is higher local property tax. An Amendment to the state’s constitutions went before voters on 7 November 2023. The amendment is expected to cut down property taxes within the state.
Despite being a tax-friendly state to retirees, Texas has an average combined 8.2% state and local sales tax rate, one of the highest in the United States.
As a black American, when deciding on the state to retire, consider issues of tax. Knowing the various tax-friendly states will help you decide which state is best for you.
So, you’re looking for the perfect state to move to on your retirement? Look up the five states covered here. Also, don’t forget to check for good guides on Amazon to help you plan and save for retirement.
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