Tags: Retirement | retirement | Florida | taxes

Taxes for Retirees in Florida

By    |   Monday, 01 Jun 2015 11:05 AM

The allure of Florida is evident in its abundant sunshine, mild weather, miles and miles of beaches, and the mesmerizing beauty of the ocean. Florida is also a generous haven for those seeking a low tax burden in retirement. Among other advantages, Florida does not charge a state income tax. It is, in fact, one of only seven states in the United States that does not tax personal income. For Florida, that includes pension and other retirement income. Florida also does not tax Social Security, although that is true of most states.

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How does the Sunshine State stack up on other tax issues for those interested in retirement in Florida? For property tax, Florida is average – or at least in the middle. The nonpartisan Tax Foundation found that Florida ranks 24th in the country for property taxes compared to home value. Median property tax on the state's median home value of $182,400 is $1,773, according to the Tax Foundation.

State sales taxes, local sales taxes, and estate taxes are other factors that those who seek retirement in Florida should consider as well. The Florida state sales tax is 6 percent. Its corporate rate is a flat 5.5 percent, according to the Tax Foundation. Although Florida has had an estate tax, it is no longer collecting revenue under that law because the tax is based on the now-repealed federal credit for state death taxes according to the Retirement Living Information Center.

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Kiplinger ranks Florida as one of the most tax-friendly states for retirement, although it notes that local sales tax can bump the rate as high as 7.5 percent. Although real estate is assessed at 100 percent of market value, permanent residents are entitled to a homestead exemption of up to $50,000 and seniors may qualify for an additional exemption. Also, the increase in assessed property value is capped at three percent annually.

The bottom line is that the AARP considers Florida a "decent sanctuary" for retirement. Florida is one of the top eight front runners with the best tax climate for retirements, qualifying that by saying "it depends on the type and amount of income you will be bringing in, the value of your home, your cash on hand, and any specific tax issues you may have."

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The allure of Florida is evident in its abundant sunshine, mild weather, miles and miles of beaches, and the mesmerizing beauty of the ocean. Florida is also a generous haven for those seeking a low tax burden in retirement.
retirement, Florida, taxes
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2015-05-01
Monday, 01 Jun 2015 11:05 AM
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