Retirement Tax Facts: 6 Reasons to Settle Down in Texas
There’s a lot to love about living in The Lone Star State. From our BBQ and blue bonnets to our Texas-sized hearts, it’s becoming a popular place for retirees to settle down! That said, folks aren’t choosing to spend their golden years in Texas just for our brisket – our retirement tax policies are nearly as friendly as our citizens! If you’re thinking of retiring in our great state, our tax advisors are here to tell you all about some of the benefits on the tax side of things you can expect to enjoy!
Texas Retirement Tax: The Biggest Game-Changer
Before we get down to the nitty gritty of retiring in Texas, it’s important to highlight the biggest game-changer. While other states impose income taxes, Texas does not! As one of only seven states that don’t have an income tax, Texas is an attractive retirement destination to those who want to maximize any income they make in addition to their social security benefits. Now, let’s talk about some more tax benefits you can enjoy as a Texas retiree!
1. Tax-Free Income
So, we’ve already touched on the importance of Texas not imposing a personal state income tax, but the implications for retirees are big! If you, like many senior citizens, plan to continue earning income to supplement your retirement savings or social security benefits, this particular policy is a significant perk. When you take into account the added factor of our low cost of living here in Texas, choosing to retire here seems like a no-brainer!
2. Tax-Free Benefits
Your personal/retirement income isn’t the only thing Texas taxes won’t touch – you will also be able to rest easy knowing your retirement benefits are safe. Whether it’s your social security savings, IRA, pension, or 401(k), much more of your hard-earned benefits will stay in your pocket, and out of Uncle Sam’s. In addition to tax-free retirement income and benefits, the sales tax in Texas is an attractive 6.25%, with an exemption for food and prescription/non-prescription drugs!
Texas Retirement Tax on Land
If you dream of retiring on your own land, Texas is a great place to do it! Our tax rate on land is based on the value of what it produces. So, if you just want to build your forever home on your land, the property taxes should be minimal.
3. Friendly Inheritance and Estate Tax
Now, if you plan on moving to Texas for your retirement years, and you’ll be leaving behind a lofty inheritance and estate to your heirs, this is a big tax benefit for you! Here in Texas, we don’t have any inheritance taxes, allowing you to pass along more to your beneficiaries. If that isn’t sweet enough, we also have very friendly estate tax policies! Simply put, the estate taxes in Texas are limited and related to the collection of federal estate tax.
4. Significant Property Tax Breaks
Another major benefit of retiring in Texas are our friendly property tax policies. In Texas, property taxes are imposed by local entities. As such, policies like homestead exemptions and tax freezes for homeowners 65+ can be implemented at the local county or city level. So, if you are looking for the most tax-friendly location to settle down in Texas, it’s as simple as finding the right county that supports these tax breaks for their senior citizens!
5. Tax Breaks for Veterans
Anyone who has visited, lived in, or known someone from Texas is aware of how much we value and respect our U.S. veterans. Just as this reverence is reflected in our actions, our tax policies also take care of these heroes. In Texas, property tax exemptions are available to disabled veterans who meet certain requirements, their surviving spouses, and the spouses and minor children of a person who dies on active duty in the U.S. Armed Forces.
6. Our Tax Advisors Live Here!
So, we doubt you need many more reasons to move here, and we wouldn’t be surprised if your bags are already packed and your flight has been booked! But, we have just one more reason for you to retire in The Lone Star State – our tax advisors live and work here! If you are planning to spend your golden years in Texas, our advisors have all the tools, experience, and knowledge to help you make the most of them.
We Are Your Texas Retirement Tax Team.
As proud Texans and passionate CPAs, our advisors are the best people to help you make the most of your retirement. We take the time to learn about you and we build custom tax strategies to meet your needs and serve your goals! If you’re ready to retire with the best tax planning, give us a call at (972) 771-6707 or visit our website!