States with tax-friendly policies for dividends/LTCG

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
duckcalldan
Posts: 144
Joined: Tue Feb 12, 2008 9:55 pm
Location: Colonial Virginia

States with tax-friendly policies for dividends/LTCG

Post by duckcalldan » Mon Dec 11, 2017 7:04 pm

We will be downsizing soon as we are less than a year away from empty nester status. We live in VA but may very well move out of state. Tax policies of said state are not at the top of our priority list, but it is a consideration.

I’m well aware of states without income tax, and of states like TN with the Hall tax which tax dividends and LTCG at a flat rate. Many other states like NC and CO have a flat tax for all types of income. But are there any states that have a favorable tax rate for investors, similar to our federal tax structure? I’m not aware of any.

livesoft
Posts: 62331
Joined: Thu Mar 01, 2007 8:00 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by livesoft » Mon Dec 11, 2017 7:16 pm

TX is pretty friendly for div and capital gains: state tax is always 0%.
Wiki This signature message sponsored by sscritic: Learn to fish.

acanthurus
Posts: 368
Joined: Sun Aug 04, 2013 8:02 am

Removed

Post by acanthurus » Mon Dec 11, 2017 7:41 pm

Removed
Last edited by acanthurus on Sun Apr 08, 2018 11:54 am, edited 2 times in total.

tbradnc
Posts: 1512
Joined: Wed Apr 02, 2008 8:30 am

Re: States with tax-friendly policies for dividends/LTCG

Post by tbradnc » Mon Dec 11, 2017 7:45 pm

The Hall tax in TN is being phased out at a rate of 1% per year and in 2022 TN will join the few other states that have no personal income tax at all.

http://www.tennessean.com/story/news/po ... /84044810/

https://taxfoundation.org/success-tenne ... -hall-tax/

harmony
Posts: 493
Joined: Sun Nov 24, 2013 1:35 am

Re: States with tax-friendly policies for dividends/LTCG

Post by harmony » Mon Dec 11, 2017 10:55 pm

The Motley Fool has a list of states with zero tax and a color-coded map of all states showing these tax rates.
https://www.fool.com/taxes/2014/10/04/t ... -rate.aspx

Note: The article is over 3 years old and doesn't address taxes on dividends, only taxes on long-term capital gains.

22twain
Posts: 1474
Joined: Thu May 10, 2012 5:42 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by 22twain » Tue Dec 12, 2017 1:38 am

SC gives a 44% deduction on long-term capital gains, which effectively reduces the maximum tax rate on LTCG from 7% to about 3.9%.
My investing princiPLEs do not include absolutely preserving princiPAL.

BrianJM
Posts: 20
Joined: Sat Jul 12, 2014 1:30 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by BrianJM » Tue Dec 12, 2017 2:16 pm

tbradnc wrote:
Mon Dec 11, 2017 7:45 pm
The Hall tax in TN is being phased out at a rate of 1% per year and in 2022 TN will join the few other states that have no personal income tax at all.

http://www.tennessean.com/story/news/po ... /84044810/

https://taxfoundation.org/success-tenne ... -hall-tax/
Here is a link on the TN Department of Revenue site that shows the rate per year during the phase out:
https://revenue.support.tn.gov/hc/en-us ... -tax-rate-

User avatar
grabiner
Advisory Board
Posts: 22556
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: States with tax-friendly policies for dividends/LTCG

Post by grabiner » Wed Dec 13, 2017 10:13 pm

GA has a huge income exclusion for retirees, $35K per person age 62-64, and $65 per person age 65+, against investments as well as retirement income, and up to $4000 of earned income. Therefore, most retirees in GA pay no state tax.

NJ also has a huge exclusion; as long as you have less than $3000 in earned income, you can exclude an amount which goes up to $75K single/$100K married in 2020. However, this is a cliff; if you have $100,001 in income, or $3001 in earned income, you pay tax on all of your earned income. (Your NJ retirement income may be less than in other states, because NJ does not allow deductions for IRAs or contributions to any retirement plan other than a 401(k). Thus, if you have records of how much you contributed to your 403(b) or traditional IRA, you will owe less NJ tax.)
Wiki David Grabiner

User avatar
dwickenh
Posts: 1296
Joined: Sun Jan 04, 2015 9:45 pm
Location: Illinois

Re: States with tax-friendly policies for dividends/LTCG

Post by dwickenh » Wed Dec 13, 2017 11:19 pm

tbradnc wrote:
Mon Dec 11, 2017 7:45 pm
The Hall tax in TN is being phased out at a rate of 1% per year and in 2022 TN will join the few other states that have no personal income tax at all.

http://www.tennessean.com/story/news/po ... /84044810/

https://taxfoundation.org/success-tenne ... -hall-tax/


I have actually been looking at Tennessee for retirement. I have checked out Clarksville. Next on the list is Paris and Dyersburg. I need to stay in the west side to be close to grandchildren per DW instructions. I would be glad to hear any insight from a resident on taxes and areas that might be to a retiree's liking.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

DSInvestor
Posts: 10877
Joined: Sat Oct 04, 2008 11:42 am

Re: States with tax-friendly policies for dividends/LTCG

Post by DSInvestor » Wed Dec 13, 2017 11:26 pm

If you like to do stuff outdoors, consider WA state. No state income tax. You get 4 seasons but it's pretty mild. Awesome outdoors activity with access to the coast and mountains. Mt Rainier NP, North Cascades NP, Olympic NP, Mt Baker. Very close to Vancouver Canada, Squamish and Whistler if living in NW part of state.
Wiki

duckcalldan
Posts: 144
Joined: Tue Feb 12, 2008 9:55 pm
Location: Colonial Virginia

Re: States with tax-friendly policies for dividends/LTCG

Post by duckcalldan » Fri Dec 15, 2017 5:11 pm

DSInvestor wrote:
Wed Dec 13, 2017 11:26 pm
If you like to do stuff outdoors, consider WA state. No state income tax. You get 4 seasons but it's pretty mild. Awesome outdoors activity with access to the coast and mountains. Mt Rainier NP, North Cascades NP, Olympic NP, Mt Baker. Very close to Vancouver Canada, Squamish and Whistler if living in NW part of state.
Near the top of the list, in fact. I'm interested in the Poulsbo area, maybe Pt Townsend to be in the Olympic rain shadow. Poulsbo is a lot closer to Sea Tac and better health care when the time comes. Bellingham is looking like a good pick as well.

fourwheelcycle
Posts: 450
Joined: Sun May 25, 2014 5:55 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by fourwheelcycle » Fri Dec 15, 2017 6:00 pm

New Hampshire has no state income tax and no tax on short or long term capital gains. We do have a 5% Interest and Dividends Tax. There is a $2,400 exclusion per person and also, I think, another $1,200 per person exclusion for people over age 65. I ought to know for sure about the over 65 exclusion, since my wife and I are over 65. However, I do all of our taxes on TurboTax and after agonizing through our painful Federal tax I just send in whatever amount TurboTax indicates for our State tax - it is very little by comparison.

I'm sure you will want to put NH on your list. Like Florida, we have very mild temperatures and no snow during the winter!

H-Town
Posts: 1232
Joined: Sun Feb 26, 2017 2:08 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by H-Town » Fri Dec 15, 2017 6:02 pm

livesoft wrote:
Mon Dec 11, 2017 7:16 pm
TX is pretty friendly for div and capital gains: state tax is always 0%.
Yep. Except that if you're not careful, you'll pay a lot of property tax instead. Unless the OP wants to buy/rent less house, he/she will still pay state tax in the form of property tax.

livesoft
Posts: 62331
Joined: Thu Mar 01, 2007 8:00 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by livesoft » Fri Dec 15, 2017 7:27 pm

Our prop taxes are way less than they would be in NY where we used to live. But our McMansion cost a fraction of what it would cost in a place like NY or CA. OTOH, no need for expensive private schooling.
Wiki This signature message sponsored by sscritic: Learn to fish.

Giuseppe
Posts: 2
Joined: Mon Oct 16, 2017 5:06 pm

Re: States with tax-friendly policies for dividends/LTCG

Post by Giuseppe » Thu Apr 12, 2018 10:55 am

duckcalldan wrote:
Fri Dec 15, 2017 5:11 pm
DSInvestor wrote:
Wed Dec 13, 2017 11:26 pm
If you like to do stuff outdoors, consider WA state. No state income tax. You get 4 seasons but it's pretty mild. Awesome outdoors activity with access to the coast and mountains. Mt Rainier NP, North Cascades NP, Olympic NP, Mt Baker. Very close to Vancouver Canada, Squamish and Whistler if living in NW part of state.
Near the top of the list, in fact. I'm interested in the Poulsbo area, maybe Pt Townsend to be in the Olympic rain shadow. Poulsbo is a lot closer to Sea Tac and better health care when the time comes. Bellingham is looking like a good pick as well.
I live in that area and those are all great spots.
You might want to consider inheritance taxes, though.
In WA they are quite high.

Carefreeap
Posts: 2392
Joined: Tue Jan 13, 2015 7:36 pm
Location: SF Bay Area

Re: States with tax-friendly policies for dividends/LTCG

Post by Carefreeap » Thu Apr 12, 2018 3:11 pm

dwickenh wrote:
Wed Dec 13, 2017 11:19 pm
tbradnc wrote:
Mon Dec 11, 2017 7:45 pm
The Hall tax in TN is being phased out at a rate of 1% per year and in 2022 TN will join the few other states that have no personal income tax at all.

http://www.tennessean.com/story/news/po ... /84044810/

https://taxfoundation.org/success-tenne ... -hall-tax/


I have actually been looking at Tennessee for retirement. I have checked out Clarksville. Next on the list is Paris and Dyersburg. I need to stay in the west side to be close to grandchildren per DW instructions. I would be glad to hear any insight from a resident on taxes and areas that might be to a retiree's liking.

Dan
Where are your grandchildren? What does your child(ren) do? Are they likely to relocate?

User avatar
dwickenh
Posts: 1296
Joined: Sun Jan 04, 2015 9:45 pm
Location: Illinois

Re: States with tax-friendly policies for dividends/LTCG

Post by dwickenh » Thu Apr 12, 2018 3:41 pm

Carefreeap wrote:
Thu Apr 12, 2018 3:11 pm
dwickenh wrote:
Wed Dec 13, 2017 11:19 pm
tbradnc wrote:
Mon Dec 11, 2017 7:45 pm
The Hall tax in TN is being phased out at a rate of 1% per year and in 2022 TN will join the few other states that have no personal income tax at all.

http://www.tennessean.com/story/news/po ... /84044810/

https://taxfoundation.org/success-tenne ... -hall-tax/


I have actually been looking at Tennessee for retirement. I have checked out Clarksville. Next on the list is Paris and Dyersburg. I need to stay in the west side to be close to grandchildren per DW instructions. I would be glad to hear any insight from a resident on taxes and areas that might be to a retiree's liking.

Dan
Where are your grandchildren? What does your child(ren) do? Are they likely to relocate?
2 children in St Louis, 2 on the west coast. 5 grandchildren in St louis area.

Kids are not likely to relocate.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

Post Reply