The 10 States Taxing Social Security in 2024 and the 2 That Just Stopped
As 2023 tax filing season draws to a close, retirees across the nation are adjusting their financial plans for 2024, but a crucial detail could drastically alter the landscape of retirement living: the taxing of Social Security benefits. While many bask in the belief that their golden years will be tax-friendly, residents in nine specific states are facing a reality check as their Social Security benefits come under the taxman’s purview.
Conversely, a wave of relief is set to wash over two states, marking an end to their era of taxing these benefits. This shift paints a complex portrait of retirement planning across the U.S., underscoring the importance of staying informed of the ever changing tax laws. Are you residing in one of these states? It’s time to uncover the impact of these tax changes on your retirement strategy and possibly reconsider your locale choice for those serene post-work years. Here are the 9 states taxing social security benefits.
Colorado
In Colorado, individuals younger than 65 by the end of the tax year can deduct either $20,000 or their taxable pension/annuity income included in the federal taxable income, whichever is less. For those aged 65 and above by the end of the tax year, Social Security benefits are not subject to state taxes.
Connecticut
For Connecticut residents, Social Security benefits become taxable when your adjusted gross income (AGI) exceeds $75,000, or $100,000 for those filing jointly. Beyond this income threshold, 25% of Social Security income becomes taxable at the state level.
Kansas
In Kansas, Social Security income is taxable for individuals whose AGI exceeds $75,000.
Minnesota
Social Security income in Minnesota is subject to state taxes for individuals with an AGI over $82,190, or $105,380 for joint filers, and $52,690 for those married but filing separately.
Montana
Montana includes Social Security income in state taxable income to the same extent it is included in federal taxable income.
New Mexico
For New Mexicans, Social Security benefits are taxable for those earning more than $100,000, or $75,000 for those filing separately, and $150,000 for surviving spouses or those filing as head of household or jointly.
Rhode Island
Social Security benefits in Rhode Island are taxable if retirement benefits are received before reaching full retirement age (typically 67) or if the AGI exceeds $101,000 for singles or heads of household, $126,250 for joint filers, or $101,025 for those married filing separately for the 2023 tax year. Individuals below these income thresholds may exempt up to $20,000 of their retirement income.
Utah
Utah imposes taxes on Social Security benefits for individuals earning more than $45,000, or $75,000 for heads of household or those married filing jointly, and $37,500 for married filing separately. Those under these income levels may be eligible for a nonrefundable tax credit.
Vermont
In Vermont, Social Security is taxable for individuals with AGIs above $60,000, or $75,000 for those married filing jointly. A partial exemption applies for incomes between $50,000 and $59,999 ($65,001 and $74,999 for joint filers).
West Virginia
West Virginia passed a law to progress from partially taxing Social Security to completely eliminating taxation in 3 years.
West Virginia won’t tax your Social Security benefits if your federal adjusted gross income is $100,000 or less for married couples filing jointly or $50,000 or less for all other taxpayers
However, if your income is greater than the applicable dollar amount, West Virginia will levy a state income tax on your Social Security payments to the same extent you must pay taxes on that income to the federal government.
Good news for West Virginia resident is the bill phasing out tax on Social Security benefits has been signed into law. Retroactive to Jan. 1 of this year, it applies to 35% deduction for 2024, 65% for 2025 and 100% deduction on Social Security income for 2026 taxes and beyond.
Welcome Relief for Missouri and Nebraska
As of 2024, Missouri and Nebraska join the list of states that no longer tax social security income.
Balancing Taxes and Lifestyle
In the ever-evolving landscape of tax laws and retirement planning, staying informed and consulting with a tax advisor for the most current information is paramount. While the tax implications of where you choose to retire are significant, remember that taxes are just one piece of the puzzle. Quality of life, access to healthcare, proximity to loved ones, and recreational opportunities also play critical roles in selecting your ideal retirement haven. As you navigate the complexities of retirement tax planning, balance these considerations with the fiscal realities. By doing so, you’ll ensure that your retirement years are not only financially sound but also rich in the experiences and connections that truly matter.
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5 States with Most Debt Signal Potential Tax Hikes, While 5 States Enjoy Fiscal Freedom
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5 States with Most Debt Signal Potential Tax Hikes, While 5 States Enjoy Fiscal Freedom
Top 10 Housing Markets Where Soaring Prices Leave Locals Priced Out, Defying Historical Norms
Real estate economists at Florida Atlantic University analyzed average expected home values based on historical data against current list prices across the nation’s 100 largest metro areas. The study used publicly available data from online real estate portal Zillow or other providers from January 1996 through the end of last month, for single-family homes, townhomes, condominiums and co-ops. The research aims to pinpoint cities with significant price disparities, shedding light on the challenges faced by long-time residents priced out of their neighborhoods amidst soaring real estate costs. Besides home owners, the findings are also important for real estate investing to identify pockets of exuberance and analyze if the higher priced metros deserve the price jump compared to historical trends. Here are the top 10 cities where current prices are much higher compared to their historical prices.
Top 10 Housing Markets Where Soaring Prices Leave Locals Priced Out, Defying Historical Norms
What SECURE Act 2.0 Means for Your Future Retirement Plan
Three years on from the groundbreaking SECURE Act, which revolutionized America’s retirement landscape for the first time in a decade, the SECURE Act 2.0 sequel legislation aims to widen the gateway to retirement plans and benefits, introducing pivotal changes like automatic enrollment in select workplace pensions, increased catch-up contributions for the seasoned workforce, and extended retirement saving opportunities for part-time employees. Moreover, it promises to bolster individuals’ ability to set aside emergency funds, ensuring swift access in times of need, marking another significant stride toward securing a more financially stable future for all. Here are some of the key provisions.
What SECURE Act 2.0 Means for Your Future Retirement Plan
Worry Mounts as Household Debt Surges and Delinquency Rates Soar
Total household debt surged by $212 billion, reaching $17.5 trillion in the fourth quarter of 2023, as reported by the Federal Reserve Bank of New York. This includes credit card balances, mortgage loans, and auto loans, all hitting record-high levels. Concurrently, delinquency rates for most debt types continue to climb, stirring concerns among economists and financial analysts about the stability of the U.S. consumer-driven economy.
Worry Mounts as Household Debt Surges and Delinquency Rates Soar
Retire Abroad and Still Collect Social Security? Avoid These 9 Countries Where It’s Not Possible
Dreaming of retiring to a sun-drenched beach or a quaint village? Many Americans envision spending their golden years abroad, savoring the delights of new cultures and landscapes. However, an essential part of this dream hinges on the financial stability provided by Social Security benefits. Before packing your bags and bidding farewell, it’s crucial to know that not all countries play by the same rules when it comes to collecting these benefits overseas. Here are the nine countries where your dream of retiring abroad could hit a snag, as Social Security benefits don’t cross every border. Avoid living in these countries so your retirement plans don’t get lost in translation.
Retire Abroad and Still Collect Social Security? Avoid These 9 Countries Where It’s Not Possible
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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