10 Most Tax-Friendly States For Retired Taxpayers

8th Best: Arizona

The downside: The high temperatures might not be to everyone’s liking. But that’s pretty much everything that’s high. The Copper State’s average combined state and local sales tax rate is 8.4%, with no tax on groceries and prescription drugs.

Individuals in higher brackets, earning more than $250,000 (for single filers) and $500,000 (for joint filers) will be required to pay a new 3.5% surtax on their taxable income as of 2021.

Read also: Will Taxing the Rich Save Social Security? Experts Weigh in

Why it’s still a good place to move: There’s no income state tax on Social Security benefits and there’s also an exemption for income up to $2,500 from federal and Arizona government retirement plans.

The residents of Arizona face a state income tax below average, of 2.59% on taxable income of $27,272 or less for single filers or $54,544 for joint filers. Those in higher brackets face a state income of 4.5% for single filers who earn more than $163,362, or couples with combined income exceeding $327,263.

Property taxes don’t cause any major disruptions to one’s budget, with a median of $617 per $100,000 in home value. Not to mention senior homeowners with a low income are allowed to freeze property values for three years.

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