www.dallasnews.com/sharedcontent/dws/bus/stories/030808 -
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Published on: 3/8/2008
Last Visited: 3/8/2008
"My No. 1 suggestion is: Don't get swept away by states without income taxes," said Tom Wetzel, president of the Retirement Living Information Center, which operates the Web site.
"The states have to get their money somehow, so they're likely to turn to higher property and sales taxes, which will wipe out any savings from no income taxes," he said.
Texans should already understand that nuance, he said, since Texas is one of seven states without personal income taxes but has the 15th-highest median real estate taxes in the country, according to the U.S. Census Bureau.
Florida also has no state income tax, but its steep local property taxes are one reason that retirees who moved there are moving again, this time to more tax-friendly communities in the Carolinas and Virginia, Mr. Wetzel said.
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Not all state income taxes treat retirement income alike: Twenty-six states and the District of Columbia exclude all Social Security benefits from their income taxes, while the remaining 15 states with broad-based income taxes tax at least part of retirees' Social Security payments, Mr. Wetzel said.
Retirees should also look at state tax exemptions for pension income, he said.
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Forty provide property tax credits or homestead exemptions that limit the value of assessed property subject to taxation, Mr. Wetzel said.
Because property taxes are always in flux, retirees should check with local tax collectors to determine current rates and each state's procedure for assessing property, he said.