Tags: Retirement | retirement | North Carolina | taxes

Taxes for Retirees in North Carolina

By    |   Thursday, 11 Jun 2015 03:20 PM

Everyone wants tax-supported infrastructure, from roads and highways to emergency services to food safety, schools, and national security, but no one wants to pay taxes. Still, retirees, so many of whom are on limited fixed income, have important reasons to avoid high-tax states. With North Carolina becoming more popular as a retirement haven, many retirees disillusioned with Florida come halfway back to their Northeastern origins and end up there, where they're sometimes referred to as "half-backs.”

It's fair to ask how folks on fixed incomes fare in the Tar Heel State. In fact, in 2006, North Carolina saw more people moving there from the rest of the U.S. than any other state, according to Southeast Discovery.

Forbes notes that North Carolina's 2013 tax reform package had some plums for older folks. The three-tiered income tax system has been replaced with a flat tax which, as of 2015, is just 5.75 percent; previously, state income tax rates could rise to as much as 7.75 percent. The estate tax has been abolished entirely (and was not onerous to begin with), and Social Security income is no longer taxed. And, even though a small tax break for pension income also vanished, along with a standard deduction bonus for those over 65, the standard deduction has been greatly increased, helping even things out.

Sales taxes now apply to more purchases than they had previously, but all prescription drugs are exempt from sales tax. Although this benefits everyone, the elderly often take more medications than their younger neighbors, while having to stretch a fixed income to fit an elastic world.

Finally, as TopRetirements.com notes, "There is a $25,000 property tax homestead exemption for people over 65 who meet certain income criteria. Even better is a circuit breaker program for eligible people over 65, which limits your property taxes to 4 or 5 percent of your income." This, coupled with low house prices, makes it easier to buy a retirement home in North Carolina without being forced to reinvest your previous home's equity in shelter, leaving more money free for the finer things in life.

While other states have lower taxes, North Carolina offers mild weather, charming architecture, and a well-educated community that welcomes seniors, and that's worth paying a little extra for in most people's books.

Related Stories:

© 2017 Newsmax. All rights reserved.

   
1Like our page
2Share
FastFeatures
Everyone wants tax-supported infrastructure, from roads and highways to emergency services to food safety, schools, and national security, but no one wants to pay taxes.
retirement, North Carolina, taxes
396
2015-20-11
Thursday, 11 Jun 2015 03:20 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved