Q&A: States Without Income Tax
What are the benefits of moving to a state with no income tax?
You may be wondering what are the benefits of living in states with no income tax. States without income taxes offer an alluring benefit to residents. Since part of your paycheck is already set aside for the federal government, the thought of not having any more taken out is a tantalizing one. More money stays in your paycheck each month, and at tax season, you may only need to provide a federal return.
Why do some states not have income tax?
You may be asking how some states don’t have any income tax, while most states do. Nine states currently don’t have an income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. States with no income tax offset the costs of infrastructure in other ways, and those costs may unexpectedly fall in your lap. Maybe you will need to plan for a potential lack of job opportunity in more rural locations, or a heavy gas tax. Many states without income tax charge higher sales or property tax, or offset the lack of income with higher prices on tobacco and alcohol. It’s important to do your research, both for unexpected levies that may impact your future income and to see if the state matches your desired quality of living. A no-income tax state is no guarantee of future financial security.
To learn more including additional considerations on this topic, view our full article here.
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