Least Tax Friendly States for Retirees

Many retirees today live on a fixed income. Those who do not are still likely to live on a limited amount of retirement savings. One of the best things that you can do as a retiree is to settle down at a home base. Before you set down your golden year roots, be sure your state is retirement friendly. As a retiree here are the least tax friendly states that you will want to avoid.EmpireStateBuilding

New York City

The tax rate for the state of New York averages to just over 12% in taxes. If you live in New York City, you will also pay city income tax. Therefore, you will owe federal, state, and city income taxes, which is a big chunk of your income. If you own a home in New York that is worth six figures, expect a hefty property tax bill each year.

Rhode Island

Rhode Island does not tax social security income for seniors with an $80,000 individual or $100,000 for married couples. All other forms of retirement income, including pensions are taxed by the state. Property tax bills in Rhode Island are among the highest in the United States.

Vermont

The state of Vermont is one of the worst states for retirees. All retirement income is subject to taxation, including much of Social Security income. Income deductions are limited to around $15,750 for a single person and $31,500 for a couple. Restaurants and prepared foods in the state have a heavy tax rate of 9% decreasing your quality of life if you enjoy dining out.

Image credit: Alain Ferraro

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Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

Huddleston Tax CPAs of Seattle & Bellevue
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Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching, Quickbooks consulting, bookkeeping, payroll and business valuation services for small business. We serve Seattle, Bellevue, Redmond, Tacoma, Everett, Kent, Kirkland, Bothell, Lynnwood, Mill Creek, Shoreline, Kenmore, Lake Forest Park, Mountlake Terrace, Renton, Tukwila, Federal Way, Burien, Seatac, Mercer Island, West Seattle, Auburn, Snohomish and Mukilteo. We have a few meeting locations. Call to meet John Huddleston, J.D., LL.M., CPA, Tawni Berg, CPA, Jennifer Zhou, CPA, Jessica Chisholm, CPA or Chuck McClure, CPA. Member WSCPA.