June 13, 2007
Consider Income Taxes When Relocating
Consider Income Taxes When Relocating
As many states close their budget gaps by raising taxes, an important factor in the calculus of where to live is shifting, particularly for retirees or people with an option of choosing between neighboring states. In the past 3 years, 26 states have raised taxes significantly in one way or another.
Of course, most people don't base where they live on taxes alone. Family, work and climate are the most important factors. Most of the states' increases followed cuts during the 1990s, when state coffers were flush with cash from a booming economy. But every year approximately one in seven Americans changes residences, according to the U.S. Census Bureau, and tax advisers and real-estate agents agree that taxes are becoming more of a consideration.
Figuring out the best state to live in for tax reasons can be even more complicated than doing your own tax return. States, cities and other municipalities have a wide range of taxes, fees and other levies that make comparisons tricky, which makes your personal situation all the more important when weighing the advantages of one state over another. How vulnerable are you to a high income tax? Is avoiding an estate tax an important concern? How much will you be affected by high property taxes?
We'd love to hear your comments on this subject if you are considering a move and taxes are (as they should be) on your mind. Use the "comment" link below to leave us your thoughts.
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