The state in which you reside determines whether you are required to pay state taxes on retirement distributions. There are 12 states that don’t tax distributions from pensions, 401(k)s or IRAs: Pennsylvania, Florida, Texas, Tennessee, Alaska, Nevada, New Hampshire, South Dakota, Washington, Wyoming, Illinois, and Mississippi. While state income taxes can have a large impact on your retirement, it is important to take property and sales taxes into consideration as well. At Brandywine Oak, we pride ourselves in educating our clients on the most tax-efficient strategies in retirement.
To learn more about how different states tax retirement income, please read AARP’s informative article https://www.aarp.org/money/taxes/info-2020/states-that-dont-tax-retirement-distributions.html.
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