Ernst & Young Employees: Is your state tax-friendly? Here are the most and least taxed states in America

The tax landscape of potential Retirement locations can affect Ernst & Young employees - moving to a tax-friendly state could reduce taxes and increase savings for Retirement, said (Advisor Name), a representative of the Retirement Group, a division of Wealth Enhancement Group.

The right place to retire could save you big bucks for those nearing Retirement, says (Advisor Name), a representative of the Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. Tax burdens differ between states in the United States.

2. Tax-friendly states for retirees

3. Strategies to reduce tax liability and maximize financial well-being.

A new report details stark differences in tax burdens across U.S. states - and how that disproportionately burdens taxpayers in some places compared to others. While the average American pays about USD 11,000 in federal taxes a year, the actual tax burden largely depends on where you live, personal finance website WalletHub said. It is exacerbated by differences in state and local tax rates, where residents pay double the amount of income taxes compared to low-tax states. The researchers used three types of taxes to determine the tax burden: homestead and excise taxes, individual income taxes, and sales and excise taxes. The tax burden for each state was computed from household income, home and car values, and household spending data.

For those looking to cut their taxes and keep more of their paycheck, Alaska offers the best deal at just 5.06%. However, new residents should expect to pay a big chunk of their income in taxes - 12.47%. The regional disparities are highlighted in WalletHub's rankings of states with the highest and lowest tax burdens. New York, Hawaii, Maine, Vermont and Connecticut rank among the highest tax states. Meanwhile, residents of low-tax states like Alaska, Delaware, New Hampshire, Tennessee and Florida pay a relatively light tax burden.

Understanding these differences in tax burdens may help individuals, particularly A.O. Smith workers and retirees planning for their financial futures, make sound decisions about residence and financial strategies. Consider the tax implications of different states to optimize financial situation and possibly reduce tax liabilities. People should research and analyze the tax landscape of their desired location to maximize their money and secure a retirement.

How tax-friendly a state is can affect your retirement - literally. Kiplinger's study from February 24, 2023, found some states are more tax-friendly for retirees than others. Taxes on your retirement income such as income taxes, property taxes, sales taxes and tax exemptions can affect your financial security in retirement. States like Alaska, Wyoming and Nevada - which have no income taxes - are often tax-friendly for retirees. In contrast, Connecticut, New York and New Jersey have higher taxes. Consideration of a state's tax friendliness may help A.O. Smith workers planning to retire and current retirees decide where to live and how to budget for retirement.

Planning for retirement involves plotting a course across terrain. Just as seasoned explorers pick their path according to topography, A.O. Smith workers and retirees must determine how tax friendly states are before they settle down. Imagine a journey where some states offer smooth sailing - a river with low taxes - while other states impose mountainous taxes on you. Know how state taxes affect your route to financial peace and keep more of your savings in your pocket. Also read: set sail on a tax-friendly voyage to the most and least taxed states for a fun and financially secure journey to retirement

Articles you may find interesting:

Sources:

1. Kiernan, John S. 'States with the Highest & Lowest Tax Rates.'  WalletHub , 4 Mar. 2024,  www.wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416?utm_source=chatgpt.com .

2. Washington, Katelyn. 'State-by-State Guide to Taxes on Retirees.'  Kiplinger , 22 Oct. 2024,  www.kiplinger.com/retirement/600892/state-by-state-guide-to-taxes-on-retirees?utm_source=chatgpt.com .

3. Schubel, Kate. 'Retirement Taxes: How All 50 States Tax Retirees.'  Kiplinger , 18 Jan. 2025,  www.kiplinger.com/retirement/602202/taxes-in-retirement-how-all-50-states-tax-retirees?utm_source=chatgpt.com .

4. 'How the 50 States Rank By Tax Burden.'  CPA Practice Advisor , 1 Dec. 2024,  www.cpapracticeadvisor.com/2024/12/01/how-the-50-states-rank-by-tax-burden/103495/?utm_source=chatgpt.com .

5. Schubel, Kate. 'States That Won't Tax Your Retirement Income in 2025.'  Kiplinger , 2 Feb. 2025,  www.kiplinger.com/taxes/states-that-dont-tax-retirement-income?utm_source=chatgpt.com .