state tax on $60k income (MFJ)

perinova

perinova

Full time employment: Posting here.
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Using the smartasset.com tool, I was curious how I would fare in other states.
A few surprises there...

NH, NV, TX, FL, WA $0

CA $874
AZ $804
NM $879
VT $768

NJ $963
RI $969
LA $1182
SC $1128
ME $1056

NC $1534

NY $2030 (not in NYC)
VA $2112
OH $1936 (local tax included)
CT $2000
WV $2098

GA $2209
DE $2564
MA $2730
HI $3024

DC $3230
OR $3903
MD $3891 (local tax included)
NYC $3498 (local tax included)
PA $4196 (local tax included)
 
If I did the math right, Idaho would be about $1188 assuming 2023, MFJ, both over 65, $60K AGI, standard deduction, and no federally taxable SS.

If any of the SS was federally taxable, you could subtract 5.8% of the taxable portion from the $1188.

Not sure how well the SmartAsset tool does all 50 state taxes.
 
What classification for the income? NJ has a retirement exclusion thing. $100k for MFJ with total income less than $150k.
 
perinova said:
Using the smartasset.com tool, I was curious how I would fare in other states.
A few surprises there...

NH, NV, TX, FL, WA $0

CA $874
AZ $804
NM $879
VT $768

NJ $963
RI $969
LA $1182
SC $1128
ME $1056

NC $1534

NY $2030 (not in NYC)
VA $2112
OH $1936 (local tax included)
CT $2000
WV $2098

GA $2209
DE $2564
MA $2730
HI $3024

DC $3230
OR $3903
MD $3891 (local tax included)
NYC $3498 (local tax included)
PA $4196 (local tax included)
Click to expand...

Tennessee should be added to your 0 list.
 
If this is retirement income, Illinois is zero for 401k, ira, ss, and pensions. Investment income is taxed at 4.95% over 4850 plus 5% of property tax (or 6850 plus 5% of PT if over 65).
 
NY has a $20K pension/IRA exclusion over 59.5. No tax on Social Security.
 
IMHO, that calculator is overly simplified. It looks like it assumes only wage income so not too relevant for retirees.

I was surprised PA was the highest but this is one place where the calculator is pretty good (for wages only). It includes local income tax and accounts for which city you are in. OP must have picked Philadelphia or one of the few other cities with very high local income tax. Most of the state is 1% which makes state and local income tax on $60K MFJ about $2,500.
 
Not good considering hawaii is 0% for pensions state/fed/military and that creates only SS. My parents make around $150k retired in hawaii and they pay less than $1500.

The calculator doesn't consider retirement income. CA i believe also doesn't tax retirees pensions. And CA has prop 13 which makes living there as a retiree very attractive.
 
For us MIL retired....

no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes only dividends and interest income.

no tax on military retirement benefits: Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, and Wisconsin.

partially tax military retirement benefits. These states include Colorado, Delaware, Georgia, Idaho, Kentucky, Maryland, New Mexico, Oregon, South Carolina, Virginia, and West Virginia. The District of Columbia also taxes military benefits partially.

fully tax military retirement and offer little to no tax benefits for retirement income: California, Montana, Rhode Island, Utah, and Vermont.

source: https://turbotax.intuit.com/tax-tips/military/states-that-dont-tax-military-retirement/L6oKaePdA
 
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USGrant1962 said:
IMHO, that calculator is overly simplified. It looks like it assumes only wage income so not too relevant for retirees.

I was surprised PA was the highest but this is one place where the calculator is pretty good (for wages only). It includes local income tax and accounts for which city you are in. OP must have picked Philadelphia or one of the few other cities with very high local income tax. Most of the state is 1% which makes state and local income tax on $60K MFJ about $2,500.
Click to expand...




I must agree that the calculator is extremely misleading for PA retirees.


For example, I'm retired and PA resident. Federal AGI $170K, PA state tax was $1.3K, local tax was $130 from my wife's part time job. Very much depends on what type of income you have.
 
If you take a closer look at the tax web page for each state, there is a link to a calculator for that state's retirement taxes. While the initial page shows $60K filing MFJ would result in $2209 in Georgia taxes, the linked retirement taxes page correctly allows you to enter SS, Year of Birth, Pension and Retirement Income resulting in $0 taxes in Georgia for over 65.
 
Using the link to Georgia's retirement tax calculator, I entered my SS income, $1361 for Pension (yes, it's pathetic) and another $72K in IRA withdrawals to show $1 in state taxes which is pretty accurate.

GA does not tax SS and has a $65K retirement income exclusion and then the standard deduction before any tax is due if 65 or older. It's only a $32K retirement income exclusion from 62 to 64.

This was all entered as filing Single.
 
Here in Connecticut, it would depend on the source of that $60k. If it were all social security, you wouldn't pay any income tax. If it were military retirement pay, you wouldn't pay any income tax. If it were from pensions, you wouldn't pay any income tax. And assuming you paid more than $300 in personal property tax, if it were all withdrawals from tIRAs, you would pay no state income tax. If it were wage income (and again assuming you paid more than $300 in property tax), your CT state income tax would be $1500. That's for 2023. In 2024, it would be about $1194.

All my numbers come from actually calculating the taxes using the relevant CT Department of Revenue Services tax forms for this year, with knowledge of how the law changes things for next year.

So, I would say your source is incorrect. I don't really blame them, because Connecticut taxes are complicated, due to a variety of credits, exemptions and thresholds, but they are still wrong
 
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Gumby said:
So, I would say your source is incorrect. I don't really blame them, because Connecticut taxes are complicated, due to a variety of credits, exemptions and thresholds, but they are still wrong
Click to expand...

I've noticed that just about every source I've seen for calculating state taxes is wrong, at least for me. They have to oversimplify everything in trying for a "one size fits all" answer, and ignore all the special conditions like which sources of income are taxable, and to what extent.

When I want to know something like that I just go to the state website and download their forms and instructions. More work, but the only way to get the true answer.
 
I have used the tool to calculate ES taxes every year. Other than that, I can't vouch for accuracy.

The tool is relevant to working income, not retired. Interestingly, I noticed it also calculates sales tax on the same sheet.

https://smartasset.com/taxes/income-taxes

There is a separate calculator for property tax, but you would have to know local property value to use it effectively

https://smartasset.com/taxes/property-taxes
 
perinova said:
I have used the tool to calculate ES taxes every year. Other than that, I can't vouch for accuracy.

The tool is relevant to working income, not retired. Interestingly, I noticed it also calculates sales tax on the same sheet.

https://smartasset.com/taxes/income-taxes

There is a separate calculator for property tax, but you would have to know local property value to use it effectively

https://smartasset.com/taxes/property-taxes
Click to expand...

A property tax calculator like that wouldn't work for Connecticut either. We have eight counties here, but they are nothing more than lines on the map. We have no county government. Instead, each of our 169 cities and towns has their own mill rate based on their own budget and the value of their own grand list. It varies a lot within a very small area.
 
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added a few more states, still using https://smartasset.com/taxes/income-taxes :)

NH, NV, TX, FL, WA, TN, AK, WY, SD $0

CA $874
AZ $804
NM $879
VT $768

NJ $963
RI $969
LA $1182
SC $1128
ME $1056

MO $1246
ID $1353
NC $1534
CO $1421
MS $1670 [401k/IRA distributions not taxable]

MI $1993
NY $2030 (not in NYC)
VA $2112
OH $1936 (local tax included)
CT $2000
WV $2098
WI $2030

MT $2208
GA $2209
DE $2564
MA $2730
IL $2730 [401k/IRA distributions not taxable]
IA $2651 [401k/IRA distributions not taxable]
UT $2790
HI $3024

DC $3230
OR $3903
MD $3891 (local tax included)
NYC $3498 (local tax included)
PA $4196 (local tax included) [401k/IRA distributions not taxable]
 
For MD, depends on the nature of the income. For example, there is a pension exclusion available to people over 65 and below 65 for a subset of cases (e.g. military, law enforcement ....).
 
A few years ago, I undertook a similar (crude) exercise using the MMM Case Study (Cashflow) Worksheet. But I targeted two pertinent retirement scenarios. In both, there is a $60k govt. pension. In addition, one scenario (early years) had us drawing $50k from tIRA. The other scenario (later years) had us drawing $60k in SS. The following table is sorted based on the second scenario.

You see that some notoriously high-tax states are reasonable for retirees (like NY, PA, HI). I did this in 2019, so I think IL had not yet removed taxes on IRA withdrawals at that time?

50IRA+60Pension66SS+60P
AK00
FL00
GA00
NV00
NH00
SD00
TN00
TX00
WA00
WY00
HI24820
PA4848
AZ289458
NY2870220
CA3950893
NJ10391039
ND11461126
OH32001367
LA36541602
ME49011668
SC52351735
CT39781878
IN35301924
OK44881988
DC58092030
ID55052040
MS45682068
WI52232088
NC48002182
MI43672242
MD47242350
MO46002432
DE57002449
AL49732470
MA51892666
KY53192819
IL53002822
VA57052840
CO40362877
AR63792929
IA70342958
RI34383400
VT38473780
NM39003813
OR87214221
NE45634493
KS46054557
UT43144624
MN56695600
WV58665800
MT61156044
 
Most of you probably already know the following information,

Social security is usually not taxable except:
CO over 20,000 MFJ if under 65yo ONLY, not taxed if >=65yo
RI over 20,000 MFJ if under 67yo ONLY, 126,250 if >=67yo
MT over 32,000 MFJ
VT over 75,000 MFJ
UT over 75,000 MFJ
NM over 150,000 MFJ
CT over 100,000 MFJ
MN over 105,380 MFJ
RI over 126,250 MFJ if over 67yo
KS over 75,000 (not sure MFJ)
 
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SS not taxed at all in Idaho, and I'm guessing not in many other states.

As an aside, states obviously compete for retirees with their tax policy. Retirees are probably desirable residents in most cases.

If you have a stash of some size, you may want to look at the state's inheritance tax policies and their estate tax laws. Some states are nicer than others in how they treat resident decedents.
 
Out-to-Lunch said:
You see that some notoriously high-tax states are reasonable for retirees (like NY, PA, HI). I did this in 2019, so I think IL had not yet removed taxes on IRA withdrawals at that time?
[/TABLE]
Click to expand...

IL still exempts 40k/IRA distributions apparently.
I don't see any exemption in NY in my reading?
 
SecondCor521 said:
SS not taxed at all in Idaho, and I'm guessing not in many other states.

As an aside, states obviously compete for retirees with their tax policy. Retirees are probably desirable residents in most cases.

If you have a stash of some size, you may want to look at the state's inheritance tax policies and their estate tax laws. Some states are nicer than others in how they treat resident decedents.
Click to expand...

The six states that impose an inheritance tax are:

Iowa
Kentucky
Maryland
Nebraska
New Jersey
Pennsylvania
 
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