Taxes can take a big bite out of your income. Some states in the United States offer very low or no state taxes at all. This can make a major difference for people who want to keep more of what they earn or save. Moving to a low-tax state can help you lower your overall cost of living and give your savings more time to grow.
There are several states where people live comfortably and avoid paying income tax. These places can be attractive for retirees, remote workers, and anyone looking to simplify their financial life.
Here are some of the top places to consider if you want to pay less in taxes.
Florida
Florida is one of the most popular states for people looking to avoid state income taxes. Retirement income, wages, and investment income are not taxed at the state level. This makes Florida appealing to people who rely on Social Security, pensions, or investment earnings.
Florida also offers property tax breaks for permanent residents and has no estate or inheritance tax. Along with beaches and warm weather, these financial benefits continue to attract new residents every year.
Tennessee
Tennessee does not tax personal income. The state used to tax interest and dividends, but that ended recently. That makes it easier for people living off savings to keep more money in their accounts.
Tennessee also has a low cost of living, especially in rural areas. Property taxes are below the national average. Cities like Nashville and Knoxville offer growing job markets, modern amenities, and a good quality of life.
Texas
Texas has no state income tax and strong job growth. This makes it a common destination for families and professionals looking to move. While property taxes can be higher than in some other states, the absence of income tax helps balance things out.
Texas has no tax on retirement income and no estate or inheritance tax. Housing is still relatively affordable in many areas. Major cities like Dallas, Austin, and Houston provide access to jobs, schools, and entertainment without a state tax burden.
South Dakota
South Dakota does not tax income, retirement benefits, or capital gains. The state also does not charge estate or inheritance tax. Property taxes are moderate and the overall tax burden is one of the lowest in the country.
South Dakota has a strong state budget and low debt levels. Cities like Sioux Falls and Rapid City provide modern services while smaller towns offer quiet living with wide open space. This is a good option for people who want low taxes and simple living.
Wyoming
Wyoming has no income tax and some of the lowest property taxes in the country. The state also does not tax Social Security, pensions, or withdrawals from retirement accounts.
Wyoming is known for its natural beauty and small-town lifestyle. It offers a peaceful environment and a very low tax burden. While it may not have large cities, the savings on taxes can make up for the slower pace.
Nevada
Nevada does not collect state income tax and has no estate tax. Retirement income is not taxed, and property taxes are reasonable. This makes Nevada attractive for people looking to relocate from more expensive states.
Las Vegas is the largest city and offers a wide range of services and entertainment. Smaller towns like Reno and Henderson are growing quickly and provide a strong quality of life with a low-tax advantage.
Alaska
Alaska stands out not just for its lack of income tax, but also because it pays residents each year through the Permanent Fund Dividend. While the climate is cold and the location remote, the financial benefits are clear.
There is no state sales tax and no tax on retirement or personal income. Property taxes vary by area but are generally manageable. For people who enjoy nature and a quiet setting, Alaska offers a unique combination of freedom and financial savings.
Washington
Washington has no personal income tax. It does collect sales tax and property taxes can be high in some areas, but people who do not want to pay tax on earnings will find relief here.
Seattle and surrounding cities offer strong job markets and economic growth. For remote workers or business owners, Washington may offer both opportunity and tax savings.
How to Decide
When choosing a low-tax state, consider more than just the absence of income tax. Look at property taxes, sales taxes, cost of living, healthcare access, and local services. A place with no income tax but very high property taxes might not save you money in the long run.
Also think about your lifestyle. Do you prefer rural space or urban convenience? Are you comfortable with colder weather or limited public transportation? A tax-friendly state should also match your daily needs and personal goals.
A smart move can help you lower your financial stress and stretch your money further. Low-tax states offer real savings, and with careful planning, you can find one that fits your life and your wallet.
Sources
https://www.cnbc.com/2023/04/18/these-9-us-states-have-no-income-tax.html
https://www.kiplinger.com/retirement/604479/the-10-most-tax-friendly-states-for-retirees
https://www.investopedia.com/retire-in-these-states-to-keep-more-of-your-money-5187075
https://www.moneygeek.com/living/states-with-lowest-tax-burden/
https://www.nerdwallet.com/article/taxes/states-with-no-income-tax
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