Do you hate paying taxes? These 7 States Have No Income Tax
Why waste more money in taxes than necessary?
- State income taxes can eat away at your income.
- From coast to coast, you will find a tax-free existence in these states.
Life has a way of being dear. From car payments to mortgage costs to the need to put food on the table, many people struggle to stretch their paychecks month after month. And what complicates the issue is the question of taxes – having to pay a portion of your earnings to the federal government and, in many cases, to your home state.
Some states, however, do not impose income tax. And so if you’d rather keep more money to yourself, you might consider making one of these your home.
The seven states without income tax
You will not pay any income tax if you move to the following states:
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- South Dakota
It should also be noted that Tennessee and New Hampshire do not impose state income tax on wages. However, they tax other types of income, such as the interest you earn on your savings account. They also tax dividend income you earn in a brokerage account.
Should you move to a state with no income tax?
It depends. Obviously, not paying income taxes could be a big source of savings. But you could spend more money another way.
Alaska, for example, is a very expensive state to live in, even though it has no state taxes. Because a lot of goods have to be brought in, you might pay more for groceries and essential household items. And also, because things are quite spread out in Alaska, you might spend more on transportation. Housing there is not cheap either.
Parts of Washington, meanwhile, can be very expensive, especially around Seattle. Likewise, while there are plenty of low-cost cities you can move to in Texas, if you’re considering a big city, like Austin, you’ll need to be prepared to spend a small fortune on housing.
Then there are other factors to consider, like school systems (if you have kids), climate, and access to amenities. Alaska is beautiful. But it is also very cold most of the year.
Meanwhile, in many parts of Wyoming and South Dakota, you’ll enjoy beautiful open spaces. But you may have to travel far to access shops or restaurants. And while you enjoy the Florida heat in January, you might also find yourself cursing your decision to move there once the summer heat makes stepping outside feel like stepping into a furnace.
Also consider where your friends and family live. If your entire support network is concentrated in the Northeast, giving it up to move to Nevada may prove more difficult than expected.
Finally, think about the jobs available in your field. If you are a teacher or a nurse, you may be able to find a job anywhere. But if you work in tech, opportunities in Wyoming may be limited unless you have a job that allows you to work remotely full-time.
All in all, it pays to research the states above and see if they are right for you. But don’t switch to just one because there’s no income tax.
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