I'm getting to the point where our next unit will be our last. And, as such, we are hoping to position ourselves so that our last unit is in the area where we want to retire to.
That being said, is there someplace that lists what States do not tax military retirement income?
Good, albeit, dated information from both of those sites. Although Washington has no income taxes, period (hooray, wa!), it does list the state as having one of the highest sales taxes in the country - got to pay the government bills somehow, right?. The rate listed for Washington was incorrect. Our sales tax is 8.9% as of this writing.
Of interest though is since we pay no income taxes, on the federal 1040, we can deduct a large portion of the sales tax from our income using a provided tax table inside the 1040 instruction booklet. Hooray again!
Remember it rains in Seattle every day, so don't make plans to move here, okay?
Badge3157 is correct about Washington Sales Tax. The real beauty of the state of Washington is that it is located directly above Oregon, which has no sales tax. If you position yourself in a location in southern Washington, you can take advantage of the best of both worlds; no state income tax and no sales tax. Portland and Astoria are two towns that have large CG populations that provide opportunities to live across the river in Washington (Vancouver and Long Beach). It is working out great for me!
I'll second the notion that a look at taxes should include ALL taxes, not just a military pension. What good is it to save a few dollars on the pension while holding onto your ankles with all the other taxes?
As indicated above,up here in Washington, we don't have an income tax. (Although the knuckleheads in Olympia are always talking about it.) But we do have a fairly steep sales tax. My property taxes run about 1% of assessed value. Some places may be higher or lower.
What really chaps my butt is that as a business owner, I pay tax on the GROSS, not net of my company. So although some of my gross already pays the sales tax, fuel tax, and payroll taxes, I'm taxed on this money again. I'm paying state taxes on money I've paid to the state in the form of state taxes!
Looking at the state income tax on your pension is important, but it's only one piece of the puzzle. Don't save $100 in order to pay $500.
I'll second the notion that a look at taxes should include ALL taxes, not just a military pension. What good is it to save a few dollars on the pension while holding onto your ankles with all the other taxes?
Not just taxes. An article in today's paper shows AZ with one of the lowest state income taxes in the nation. However.....car insurance here is one of the highest in the nation; even higher than Calif.
Perhaps I am wrong and that's ok, but since our military pay gets taxed at the federal level, not paying state taxes is not exactly true. If you don't pay state taxes, then your federal taxable income is higher. Considering how little most will pay on state taxes on your military pay might not be the best reason to select your place to retire. You might want to consider other factors. Remember, whatever you pay on state taxes, you will get to claim on your 1040 when you file your federal taxes. Be careful w/ that, especially with those states than then have very high sale taxes. Bottom line, one way or the other, you will pay. So make sure that is not the ONLY factor for selecting your state. Good luck!
I have no problems with my Florida taxes... Unfortunately the state is full, so you will have to retire elsewhere...
The only outragious taxes here are the home "beachside"... Due to the oxidation problems I wouldn't want to live there anyway... I am only 3 miles West and that is close enough for me, and about 1/8 the taxes.
Wray... P.S. Oh... Hurricane insurance beachside ... HIGH .. HIGH .. HIGH...
It's not full anymore. Stastistics came out in the last couple of weeks saying more have left than came in. Of course if you are in any of the tourist areas it never seems to change. The upside is they help keep our state green with money.
