Thinking of moving to a new state? Whether you’re looking for a place to retire or simply hoping to save money, you may want to consider moving to a state that doesn’t impose state income tax.
So which states have no income tax? Currently, only seven U.S. states do not require residents to fork over part of their paychecks come tax season. These states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. In addition, New Hampshire and Tennessee do not require residents to pay taxes on earned income, however, they do require that residents pay taxes on dividends and income from investments. Here’s a quick rundown on the pros and cons of moving to a state without state income tax as well as information on the seven states noted above.
So what are the benefits of living in a state with no income tax?
Living in a state that doesn’t tax income can be a major advantage – especially to those in high income households. While many states force high earners to pay high taxes, states without personal income tax do not tax their earnings at all. This allows high earners to save much more of their money. For this reason, many wealthy individuals choose to live the majority of the year in states without a state income tax. Of course, not having to pay state income tax also benefits individuals of all income classes. Come tax season, residents of these states are able to pocket their hard-earned money and save for retirement, vacations, school tuition and more.
From the glitzy lights of Las Vegas to the stunning Red Rock Canyon National Conservation Area, Nevada’s attractions are some of the most famous in the world. In addition to its lack of state income tax, Nevada offers residents plenty of affordable neighborhoods, good schools and interesting places to see. The state’s natural beauty and breathtaking landscapes make it especially alluring to those who enjoy the great outdoors. The state’s many high-end hotels (think: The Bellagio and Venetian) as well as its casinos and world-class restaurants also attract a ritzy, international crowd.