Author Topic: Tax Burden  (Read 2849 times)

DollarBill

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Tax Burden
« on: June 16, 2014, 08:33:10 PM »
http://taxfoundation.org/article/annual-state-local-tax-burden-ranking-fy-2011

So I've been trying to figure out my future. This week I've been trying to see how I can save on taxes because I'm free to move to another  State. I studied the above site and many others. What it seems like to me is that most States are about the same.

What I found:

- States that don't tax Military pension normally have low housing cost but high property taxes and or high sales tax
- States with no income tax have high sales tax and higher housing cost
- States with lower income have less taxes but it's probably crappy
- States with income tax have high housing but lower property tax

Almost all States seem to equal out some how. They tend to draw in different groups of people by the tax rate. Younger people seem to want to go somewhere for "how much they get paid". Older folks want to "cut down taxes". Middle aged people want a happy medium. Do any of you have suggestions on how to pick a place to save on taxes?? I know there are many ways for someone to figure out on where they want to live (Jobs, beaches, mountains, Family, housing, taxes) but I would like to think of it from a strictly FI or Fire financial stand point.

 

Undecided

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Re: Tax Burden
« Reply #1 on: June 16, 2014, 09:45:23 PM »
http://taxfoundation.org/article/annual-state-local-tax-burden-ranking-fy-2011

So I've been trying to figure out my future. This week I've been trying to see how I can save on taxes because I'm free to move to another  State. I studied the above site and many others. What it seems like to me is that most States are about the same.

What I found:

- States that don't tax Military pension normally have low housing cost but high property taxes and or high sales tax
- States with no income tax have high sales tax and higher housing cost
- States with lower income have less taxes but it's probably crappy
- States with income tax have high housing but lower property tax

Almost all States seem to equal out some how. They tend to draw in different groups of people by the tax rate. Younger people seem to want to go somewhere for "how much they get paid". Older folks want to "cut down taxes". Middle aged people want a happy medium. Do any of you have suggestions on how to pick a place to save on taxes?? I know there are many ways for someone to figure out on where they want to live (Jobs, beaches, mountains, Family, housing, taxes) but I would like to think of it from a strictly FI or Fire financial stand point.

Places are different. If taxes are your number one priority and your income is relatively higher than your spending, look at income taxes and property taxes---go for a place where they pay for their needs with sales taxes. I hear Florida works generally like that, and many places in the state are relatively inexpensive.

sheepstache

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Re: Tax Burden
« Reply #2 on: August 09, 2014, 08:15:45 AM »
Don't forget you'll be in a lower tax bracket, so other taxes may matter more than income.  Also apparently most states treat investment income as regular income but it's not always the case.  Tennessee and New Hampshire don't tax earned income but do tax dividends and interest.

I haven't found a good source for exactly what I'm looking for myself, but this has a map you can click on for some basics.  http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/  Going along with what Undecided said, we want to think more in terms of our personal situations rather than the aggregate tax burden.

Roots&Wings

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Re: Tax Burden
« Reply #3 on: August 09, 2014, 09:38:19 AM »
This website goes into a bit more detailed breakdown than the Kiplinger link: http://www.retirementliving.com/taxes-by-state 
I used it when trying to figure out where to live to optimize finances (so many options when you can live anywhere!). 

I personally didn't find that all states equal out for my situation.  Moved from a 'tax friendly' state (PA) to Florida a couple years ago and am able to save several thousand $ in income taxes and property taxes each year.  Since I don't buy much, sales tax isn't a big factor for me and food is exempt.
« Last Edit: August 09, 2014, 09:42:08 AM by step-in-time »

chasesfish

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Re: Tax Burden
« Reply #4 on: August 09, 2014, 10:07:43 AM »
I think you have to look at more than this in your working years, what is total income relative to cost of living?  Florida sounds great, but incomes are usually lower in my industry relative to cost of living.  It's an awesome place to domicile as a retiree living on dividend and interest, plus the water