Warning: file_exists(): File name is longer than the maximum allowed path length on this platform (260): C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br/wp-content/cache/supercache/www.forexbr.com.br/2019/11/06/the-most-tax-friendly-u-s-state-for-retirees-isnt-what-youd-guess-and-neither-is-the-least-tax-friendly/meta-wp-cache-dbb29e93d04e07f40624dbdac31fc51c.php in C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br\wp-content\plugins\wp-super-cache\wp-cache-phase2.php on line 71 The most tax-friendly U.S. state for retirees isn’t what you’d guess — and neither is the least tax-friendly – Forex Brasil

The most tax-friendly U.S. state for retirees isn’t what you’d guess — and neither is the least tax-friendly

It’s less taxing to retire to Wyoming.

While retirees flock to Florida in part for its tax-friendliness, those who really want to save big on their tax bill may want to head west. An analysis released this week by the personal-finance publisher Kiplinger revealed that the state of Wyoming was the most tax-friendly for retirees.

“For Wyoming, it starts with the fact that there is no state income tax,” explains Rocky Mengle, the tax editor at Kiplinger. That means the state does not tax Social Security benefits, pension income, 401(k) plan withdrawals and IRA distributions, or other income. “You can’t beat that,” he says, adding that property and sales taxes are also relatively low in Wyoming. “When you add it all up, Wyoming offers retirees the most tax-friendly environment around.”

The Kiplinger analysis looked at the estimated state and local tax burdens in each state for a hypothetical retired couple who had income from Social Security, an IRA, a private pension, interest and dividends, and capital gains. This couple also had a $400,000 home with a small mortgage and $10,000 in deductible medical expenses.

Other states that are very tax-friendly include Nevada and Florida, which don’t have income taxes, and Tennessee, whose income tax is only assessed on interest and dividends, explains Mengle. The remaining states exempt Social Security benefits from income taxes. Mengle adds that, “oddly enough, out of the 10 states with the highest sales taxes by our calculations, five are also on the retirees’ most-friendly list,” noting that, while this matters, “sales taxes tend to have the least overall impact on a retiree’s overall state tax burden.”

The 10 most tax-friendly states for retirees:

1. Wyoming

2. Nevada

3. Delaware

4. Alabama

5. South Carolina

6. Tennessee

7. Mississippi

8. Florida

9. Georgia

10. Arizona

Meanwhile, Nebraska takes the cake as the least tax-friendly state for retirees, according to the analysis, which Mengle admits is likely to surprise people. “In Nebraska’s case, high income taxes and property taxes make it hard on retirees living there,” he says, adding that the state also taxes Social Security benefits for many of its retirees and does not offer an “exemption — like you see in many other states — for other types of retirement income,” among other tax-related issues.