The recent economic mess has made many people facing retirement nervous. In reaction, many are now looking for places that don’t tax retirement income to make their money go farther.
2007 through 2009 is now commonly referred to as the Great Recession. It was a three year period that nearly saw the entire destruction of our financial system. We aren’t exactly out of the woods yet, but one area that has bounced back a bit is the stock market. With many people seeing their retirement accounts coming back up in value, they are now looking around for places to live where the income they receive from their savings will not be taxed.
The answer to this question is not a good one. There is no place where you will escape tax on your retirement income. This is because as a citizen of the United States, you must pay income tax regardless of where you live. A person living in New York City has the same duty as a person living in New Zealand.
Is there any good news? Well, yes. If you meet the IRS requirements, you can claim an exemption on your first $80,000 plus of income each year when living abroad. The amount changes yearly. To claim the deduction, you basically have to be out of the country nearly the full year. Of course, this means you need to live in places that are not going to tax your income. These would be tax havens like the Caymen Islands and such.
Many Americans would prefer to stay in the United States if at all possible. In such a situation, you are going to pay federal income taxes and there is no way of avoiding them. You can, however, mitigate your state income tax obligation by moving to a state that has no income taxes. Such states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
There are many benefits to being a citizen of the United States. Getting a tax break is not really one of them.
The answer to this question is not a good one. There is no place where you will escape tax on your retirement income. This is because as a citizen of the United States, you must pay income tax regardless of where you live. A person living in New York City has the same duty as a person living in New Zealand.
Is there any good news? Well, yes. If you meet the IRS requirements, you can claim an exemption on your first $80,000 plus of income each year when living abroad. The amount changes yearly. To claim the deduction, you basically have to be out of the country nearly the full year. Of course, this means you need to live in places that are not going to tax your income. These would be tax havens like the Caymen Islands and such.
Many Americans would prefer to stay in the United States if at all possible. In such a situation, you are going to pay federal income taxes and there is no way of avoiding them. You can, however, mitigate your state income tax obligation by moving to a state that has no income taxes. Such states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
There are many benefits to being a citizen of the United States. Getting a tax break is not really one of them.