For whatever reason you are trying to move away from your current location, be it work, family, health, or other reasons and you are seeking how to pay less in taxes by living in the right state with no taxes?
Moreover, everyone wants to lower his/her tax bill to reduce expenses. An interesting way to do this is to live in a state that does not tax you.
There are some states with no income tax, no property tax, and no sales tax. Extensive research has been conducted to help you decide on the best states to live in with little or no taxes.
While some are retiring and seeking a better life, others are offered fresh or better jobs and may have to move across states to secure appointments.
However, everyone wants to lower his/her tax bill to reduce expenses.
An interesting way to do this is to live in a state that does not tax you. There are some states with no income tax, no property tax, and no sales tax. Extensive research has been conducted to help you decide on the best states to live in with little or no taxes.
Only two categories of taxes are considered: state tax and local tax. State and local taxes are comprised of income tax, property tax, sales tax, and other taxes. However, this article focuses on income, property, and sales taxes.
States with no income tax
There are currently nine states in the US with no income tax for all citizens.
However, Tennessee and New Hampshire are looking to phase out all taxes on investment income and interest by 2025.
So, if you are to retire and would like to establish your own business, you may want to consider Tennessee or New Hampshire.
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More so, there are 11 states with no income tax for retires, and retired veterans are exempted from tax in 20 states.
In the order of the total tax burden, the nine states with no income tax are as follows:
Since 1980, Alaska has had no income tax or sales tax and boasts of the lowest total state and local tax burden of 5.1% of personal income only due to the drop in oil prices to cover for the budget deficit.
On the other hand, Alaska has a high cost of living as a result of its large remote location.
Annually, its citizens receive payment from the Alaska Permanent Fund Corp, which is revenue and investment earnings from royalties, mineral lease, and rentals.
Although Alaska is not a place many people think to retire, it does know how to treat its senior citizens. For those with a 401(k) income living in Alaska, IRA or pension is tax-exempt.
Since the bill to lower taxes on investment income was passed in 2016 and will take full effect in 2021, Tennessee looks to attract retirees who are interested in investing with tax charged only on interest and dividends for all residents.
Tennessee totals a tax burden of 6.28%, the country’s second-lowest. Lost income revenue is gotten from high sales tax with beer tax the highest in Tennessee.
Florida is the third-lowest total tax burdened state at 6.56% with no income tax. Known as a home for retirees because of its warm weather, but the state also offers zero tax on retirement income.
New Hampshire is the only state with no income tax in New England but does have tax on dividends and interest. However, the dividends and interest tax is to be phased out by 2025 following a recently passed legislation bill.
New Hampshire’s total tax burden is 6.86%, ranked fourth in the country. All retire in the state with a 401(k) plan, and IRA or pension is exempted from state taxes.
Its property tax is above average while its sales tax is below average. With no tax on retirement income, South Dakota is a retiree-friendly state.
It is also home to several credit card companies who all help to keep the state’s resi