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On the federal level, you'll be taxed on up to 50% of benefits once provisional income exceeds $25,000 for single tax filers and $32,000 for married joint filers — and on up to 85% of benefits ...
New Mexico taxes retirement income using state income tax rates, which range from 1.7% to 5.9% in 2024. Residents ages 65 and older can claim an $8,000 exemption to offset their tax burdens.
Nevertheless, with most state income tax rates ranging anywhere from 4% to 13%, avoiding these income taxes could save you hundreds if not thousands of dollars per year.
The next-best states to live in as a retiree, at least in regard to income taxes, are the following four, because while they do sport income taxes, they do not tax retirement income: Illinois Iowa
Image source: Getty Images. These 9 states tax Social Security benefits. Here are the nine states that do tax Social Security benefits:. Colorado. Connecticut. Minnesota. Montana. New Mexico
Illinois charges a flat state income tax of 4.95 percent, but all retirement income is exempt from paying the tax. This includes pension payments as well as distributions from retirement plans ...
Other forms of revenue (like sales tax and property tax) suffice as a source of funding for them. These nine income-tax-free states include: Alaska. Florida. Nevada. New Hampshire. South Dakota ...
Be sure to mark Apr. 15, 2025, as the tax payment deadline for your 2024 taxes and plan accordingly for both your federal income taxes and state taxes.
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