![]() Median Property Tax Rate: $644 per $100,000 of assessed home value.Average Combined State and Local Sales Tax Rate: 8.4%.State Income Tax Range: 2.55% (on up to $54,544 of taxable income for married filers and up to $27,272 for single filers) - 2.98% (on taxable income over $54,544 for married joint filers and over $27,272 for single filers).As a result, the state-wide average combined (state and local) sales tax rate is 9.24%, which is the fifth-highest in the nation.įor more information, see the Alabama State Tax Guide for Retirees. At 4%, the state rate is low, but some local governments tack on up to 7.5% in additional sales taxes. Plus, all homeowners age 65 or older are exempt from state property taxes.īut Alabama fumbles when it comes to sales taxes. Plus, starting in 2023, the first $6,000 of retirement income received by anyone 65 years of age or older is exempt.Īlabama also boasts the second-lowest median property tax rate in the country. Plus, Social Security benefits and payments from traditional pension plans (i.e., defined benefit plans) are exempt. ![]() ![]() While most people end up paying the highest income tax rate, it's not too bad at only 5%. But there are also non-football reasons to spend your golden years in the Yellowhammer State - like relatively low taxes for retirees. If you're a college football fan, perhaps you've thought about retiring to Alabama. Median Property Tax Rate: $406 per $100,000 of assessed home value.Average Combined State and Local Sales Tax Rate: 9.24%.State Income Tax Range: 2% (on up to $1,000 of taxable income for married joint filers and up to $500 for all others) - 5% (on more than $6,000 of taxable income for married joint filers and more than $3,000 for all others).Hopefully, the information below will help you determine if moving to a different state makes sense for your retirement budget. The results are below, along with an overview for each state of taxes that most affect retirees. So, if you're thinking of moving in retirement, where does your current state and your destination state fit it when it comes to taxes? We ranked all 50 states, plus the District of Columbia, based on how they tax retirees. And, while most people tend to focus on income taxes, other taxes - like sales and property taxes - can add up quickly, too. The difference between taxes in one location versus another could be in the tens of thousands of dollars for some people. Your overall state and local tax burden can vary widely from one place to another. But retirees often overlook an important factor when deciding if, or where, they should relocate – state and local taxes. If you want to be closer to your grandchildren, enjoy better weather or pay less for housing, moving to a different state may be the way to go. To move or not to move? That is the question for many retirees.
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