Sunday, June 26, 2011

10 Tax-Friendly States For Retirees 2011

10 Tax-Friendly States For Retirees 2011

AGE/Jörg Röse-oberreich
Where's the best state for you to retire? Here's a good place to start your search: These ten impose the lowest taxes on retirees in the contiguous U.S., according to our research. All these retiree tax heavens exempt Social Security benefits from state income taxes. Many of them exclude government and military pensions from income taxes, too, or offer blanket exclusions up to a specific dollar amount for a wide variety of retirement income.

Although relocating to an income-tax-free state such as Florida or Texas may sound appealing, sometimes the best retirement destination is a state that imposes an income tax but offers generous exemptions for retirement income.

Once you narrow your search to a few key states, zero in on local taxes. Municipalities can impose hefty property taxes or other assessments, or they may layer local sales taxes on top of statewide levies. Federal taxes? If you claim the standard deduction, they'll be the same no matter where you live. But if you itemize your deductions, you'll be able to write off real estate taxes and state income taxes, reducing your federal tax bill and easing some of the pain.

By Mary Beth Franklin

Posted via email from Duane's Proposterous Posterous

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