I happy to be done with my taxes!
With the tax deadline behind us, we can move on to more pleasant topics – like where to move to save money on our income taxes!
Last year I installed solar panels on my roof, so I was able to benefit from a 30% federal tax credit. This $7,000 tax credit was pretty substantial, but I realized that my marginal state tax bracket was still a whopping 10%.
As of writing, there are seven states that currently have zero income tax and zero dividend tax, including Florida, Nevada, Texas, Alaska, South Dakota, Washington State and Wyoming.
New Hampshire and Tennessee also have no income tax, but they do tax interest and dividends.
Here’s a nice graphical representation of the average taxes across the US.California has the highest average tax of any state at 10.4%.
Oregon, Minnesota, Hawaii, DC, New York, Vermont, and Maine also have average state income taxes that are higher than 7.5%.
If you’re dumb enough to live in California, you should move!
I suggested to get my wife that we should move to someplace nice like South-East Florida, or any other place with a low tax rate but she immediately shot down that idea.
Just in case you were wondering which states are good for the top 0.1% of income earners, you might want to consider Indiana or Utah.
Illinois, and Massachusettes are also low tax states for top earners, but they have high property taxes, so that isn’t much of a benefit.
Pennsylvania is also a low tax state with low property taxes, but they charge a 1% transfer fee when refinance your mortgage or sell your home. That’s socialist BS, if you ask me! Okay, that may be an overstatement, but unlike income tax rates which drop off when you retire property-related taxes are forever.
Here’s the complete list.