Before you consider a retirement in Georgia, make sure you are aware of all the relevant tax information. Retirement is a time to escape from the stresses of daily life and enjoy yourself.
The last thing you want to be thinking about during your retirement is taxes. By making smart decisions upfront, you can save yourself a headache later.
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Here are several things to consider:
1. Overall Tax Burden
Compared to other states in the United States, Georgia has a relatively low tax burden. Georgia ranks 32 in the U.S. in terms of total state and local taxes. This may be surprising to those who consider Georgia taxes to be extreme because they tax income. Alaska is an example of a state that does not tax income, but still has a higher tax burden than Georgia.
2. Personal Income Tax
Property tax ranges from 1 to 6 percent depending on income. The highest amount that can be taken as personal income tax is $7,000 and the lowest is $750. Georgia is the 16th-best state in the U.S. in terms of income tax, according to CNN Money.
3. Retirement Income Exemption
By 2016, all non-working income up to $35,000 per person will be exempt from taxation for those older than age 62. Income of more than $35,000 will be taxed at the normal rate discussed above.
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This exemption includes Social Security. So, if income tax laws were stopping you from choosing Georgia as a retirement destination, you rest can easy knowing that the burden of this law will affect you less than non-retired Georgians.
4. Moderate Sales and Other Taxes
In Georgia, sales tax is only 4 percent. While there are several states which tie this number, only Colorado undercuts it with a sales tax of 2.9 percent. Property tax fluctuates depending on the region of Georgia in which you live. Georgia ranks at No. 25 in a national ranking of states by income tax.
Based on age and income level, there are a number of property tax homestead exemptions offered both at the state and local level. In Georgia, the gasoline tax is 44.93 cents per gallon. The diesel fuel tax is 54.50 cents per gallon. The cigarette tax is 37 cents per pack of 20.
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