Georgia: Tax-Friendly for Retirees

Most Georgia retirees find Georgia to be tax-friendly. Kiplinger’s Retiree Tax Map, Washington, D.C. – based, lists Georgia as the #7 tax-friendly state for retirees. Though it has dropped from #5 in 2015, it still remains a very good tax environment for retirees. Kiplinger’s reveals senior tax breaks across all 50 states and compares taxes on income, including Social Security benefits, pensions and other forms of retirement income, property, everyday purchases and, ultimately, your estate. The top 10 tax-friendly states for retirees, in order are: Alaska, Wyoming, Nevada, Mississippi, South Dakota, Florida, Georgia, Delaware, Louisiana, and Tennessee. In Georgia, Social Security income is exempt and so is up to $35,000 of most types of retirement income for those age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer. The statewide sales tax is 4 percent, but jurisdictions may add up to 4 percent of their own taxes. Also, seniors may qualify for deductions from property taxes. Adding to Georgia’s appeal is that state tax breaks on retirement income from pensions and investments are saving older Georgians about $864 million this year. Kiplinger.com, publishers of personal finance advice and business forecasts, released its information on Monday, October 26^th. Wealthy retirees with pensions and IRAs especially get a good deal in Georgia. The ranking was based on several state tax policies such as Georgia’s exemptions from estate, inheritance and Social Security taxes as well as its four percent statewide sales tax. There are questions related to Kiplinger’s rankings, whether they took into account the fact that Georgia can levy up to a four percent sales tax, including that on groceries. According to Carl Davis, research director with the Institute on Taxation and Economic Policy, those taxes on groceries would be more significant to seniors than the state’s estate tax exemption. There is also concern that the rankings ignore the diverse nature of retirees. Davis continued, that “low-income seniors living on Social Security are impacted by state and local taxes in a very different way than a middle-income person collecting a pension or a very high-income person living off their investments.” Sandra Block, senior associate editor at Kiplinger’s Personal Finance, revealed that Kiplinger’s tries to provide as much information on taxes that most seniors pay so that individuals can draw their own conclusions. Others contend that housing and energy costs, two of the biggest expenses for seniors, rather than state tax policies, are likely to be a retiree’s primary consideration in deciding where to live. For additional information go to: http://www.politifact.com/georgia/statements/2015/nov/13/Kiplinger-com/georgia-tax-friendly-state-retirees/