Which states have no income taxes at all?
As of 2023, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax.
According to the updated MoneyGeek analysis, the most “tax friendly” state overall was Nevada, where the median family owes about 3% of its income in taxes. Meanwhile, 13 states earned either a D or F grade for tax burdens. For some of those states, like Oregon, high personal income tax rates are to blame.
States without income taxes may save you a lot of money when it's time to file taxes, but there may be hidden costs of living in such states, like higher sales and property taxes. Before moving, it's important to consider the full picture to better understand the potential impact on your finances.
As of 2023, nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — do not levy a state income tax.
Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — have no income taxes. New Hampshire, however, taxes interest and dividends, according to the Tax Foundation. Washington state taxes some long-term capital gains, but not income or dividends.
South Dakota
South Dakota is considered to be very tax-friendly towards retirees. There is no state income tax in South Dakota. This means that there is no state income tax on Social Security benefits, distributions from retirement accounts such as IRAs or 401(k)s, or pension benefits from public or private pensions.
While Florida does not tax personal income, it's important to note that the state does place a levy on corporate profits. So if you own a company doing business in Florida, you may owe money to the state government. Local governments in Florida also depend on property taxes for revenue.
The state imposes no income tax on its residents but makes up the lost revenue in other ways, mainly through higher sales taxes. The state's noteworthy tax system, coupled with the April 15 deadline to file federal income tax returns, can complicate people's understanding of the process.
Hawaii is the state with the lowest real estate property tax rate, while New Jersey is the state with the highest, according to personal finance site WalletHub.
Be Super-Rich. Finally, it's quite easy to pay no income taxes if you're extremely rich. In our tax system, money is only subject to income tax when it is earned or when an asset is sold at a profit. You don't have to pay income taxes on the appreciation of assets like real estate or stocks until you sell them.
Which states have the highest property taxes?
Property taxes vary by state
New Jersey had the largest median property tax bill for singe-family homes in 2023. Connecticut, New York, New Hampshire and Massachusetts rounded out the top five states with the most expensive median property tax bill.
Key Takeaways. It's perfectly legal to file a tax return even if your income falls below the IRS minimum requirement to file.
At the state level, policies vary: 38 states and the District of Columbia do not tax Social Security benefits, while 11 states do. One state, Colorado, only taxes Social Security benefits received by residents under age 65. Rates vary by state, as do the exclusions and income limits.
Ivory Coast. The country with beach resorts, rainforests, and a French-colonial legacy levies a massive 60% personal income tax – the highest in the world.
“Nationally, people in the least-wealthy fifth of the population pay around 11.4% of their income in state taxes, while the richest one-percenters pay 7.2%.” Best state for higher-income individuals: Alaska. Worst state for higher-income individuals: New York. Best state for middle-income individuals: Alaska.
New Mexico is the only state paying less in taxes than it receives in support – paying only 85 cents in federal taxes for each dollar of support.
Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.
Florida. Once again, Florida leads our list of best states to retire, as it's one of the most affordable places for retirees. Why? Florida is a “very tax-friendly state” with no state income tax and no tax on pension income — which is great for people who want to enjoy their retirement fund to its fullest potential.
This includes Florida, California, and Hawaii, making it the perfect destination for US citizens who want to move for retirement without crossing international borders. As one of the most liberal cities in the US, Berkeley in California is a particularly good choice for the best warm liberal places to retire in USA.
Senior Citizen Exemption – Property tax benefits are available to persons 65 or older in Florida. Seniors may qualify for an extra exemption for an additional $50,000 of home value.
What is the 183 day rule in Florida?
183 Day Rule for State Residency in Florida
Under the rule, the taxing states require that a person looking to declare residency in Florida must reside in Florida for at least 183 days (in other words, one day more than six months). Note that any time spent in the state can count as a day.
If you make $70,000 a year living in the region of Florida, USA, you will be taxed $13,523. That means that your net pay will be $56,477 per year, or $4,706 per month.
"If no one filed his or her income tax, that would mean a huge increase in tax evasion, and much less money for the federal government, which already runs substantial deficits," Professor Chernick said. "So the government would have to borrow a lot more money, and the spending would have to go way down.
Texas Property Taxes
Property taxes in Texas are the seventh-highest in the U.S., as the average effective property tax rate in the Lone Star State is 1.60%. Compare that to the national average, which currently stands at 0.99%. The typical Texas homeowner pays $3,797 annually in property taxes.
Limited State Income Tax and Reliance on Property Taxes:
Unlike other states that collect income taxes to fund public services and infrastructure, Texas relies heavily on property taxes as a primary source of revenue. The burden of funding essential services falls on homeowners, leading to higher property tax rates.
