Tags: Retirement | retirement | California | taxes

Taxes for Retirees in California

By    |   Tuesday, 02 Jun 2015 11:55 AM

When the elderly are looking for a place to call their home for their golden years, there are a lot of decisions to make. For those who dream of retirement in California, money plays a large role in this decision. Other than the high cost of living and monstrous housing costs, there is also the fact that California has one of the highest tax burdens in the nation. Here is what everyone needs to know about taxes if they want to seek their retirement in California.

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  1. Retirement Benefits - While most of the taxes in California are a huge burden to the tax payers, the one area that this is not true is the social security and retirement benefits. Those are exempt when it comes to personal income taxes. Also exempt are railroad retirement benefits and most military disability retired pay, although there is no guarantee in those cases of total protection. All United States Department of Veterans Affairs benefits are also not taxable by the federal or state tax commissions.
  2. Sales Tax - This is one area where things get expensive. The state of California is already more costly than almost anywhere in the U.S. when it comes to the cost of living, and the sales tax doesn't help. It is currently 8.25 percent, which is the highest in the entire U.S. It gets even worse, because certain localities can then add another 1.5 percent to that, making taxes on common goods outrageous.
  3. Property Taxes - At one time, California had what was known as the Homeowner Assistance Program, which offered assistance and property tax relief to people who were at least 62 years of age and met certain minimum annual income thresholds. This was a huge help to retirees in California, but that program was halted when funding was cut and is no longer there to help the elderly. However, seniors can seek help, if they are overtaxed, with a parcel tax exemption. To learn if a person qualifies, they should contact the agency that imposed the parcel tax on their property.
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  5. Personal Income Tax - The state of California has the fourth highest tax burden, behind New York, New Jersey, and Connecticut. The taxes paid equaled 11.2 percent of the residents' total income. When it comes to the total state and local taxes, the percent of total taxes paid by residents were the highest in the nation. In 2010, the total collected from state income taxes equaled $1,229 a person.
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When the elderly are looking for a place to call their home for their golden years, there are a lot of decisions to make. For those who dream of retirement in California, money plays a large role in this decision.
retirement, California, taxes
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2015-55-02
Tuesday, 02 Jun 2015 11:55 AM
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