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Old 05-01-2016, 07:26 PM
 
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Trying to get a feel for the state and local taxes (Louisville) for a single retiree (renting in Louisville). I'd be most interested in understanding:

--the local and state personal income taxes on private IRAs (retirement income)--is all retirement income subject to income tax (except social security)?

--total sales tax in Louisville, combined state and local (are groceries taxed?)

-- the annual property tax on cars (or "use" or "excise" tax on cars), 6% of NADA trade-in value on used cars coming into state for the first time. Is this usage fee assessed annually or is it a one-time fee for new registrations in the state?

I looked up the trade-in value of a 2008 civic in average condition ($6,000 on NADA website), and if that amount is the same as the NADA database that the KY dept of revenue uses, then I would be assessed a $360 motor vehicle "usage" tax. Seems high for a small used car that is 8 years old.

Last edited by olderandwiser456; 05-01-2016 at 07:58 PM..
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Old 05-01-2016, 08:54 PM
eok
 
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Groceries are not taxed. There is no local sales tax, but just a 6% state sales tax. The car tax doesn't mean much to me because I never own expensive cars. The cars I own are usually worth around $10,000. And the annual tax on those is low enough that I hardly even notice it nor remember it. The use tax is only when you bring a car into the state without paying 6% sales tax on it in another state. Hopefully other people will answer your other questions.
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Old 05-01-2016, 09:06 PM
 
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Quote:
Originally Posted by olderandwiser456 View Post
Trying to get a feel for the state and local taxes (Louisville) for a single retiree (renting in Louisville). I'd be most interested in understanding:

--the local and state personal income taxes on private IRAs (retirement income)--is all retirement income subject to income tax (except social security)?

--total sales tax in Louisville, combined state and local (are groceries taxed?)

-- the annual property tax on cars (or "use" or "excise" tax on cars), 6% of NADA trade-in value on used cars coming into state for the first time. Is this usage fee assessed annually or is it a one-time fee for new registrations in the state?

I looked up the trade-in value of a 2008 civic in average condition ($6,000 on NADA website), and if that amount is the same as the NADA database that the KY dept of revenue uses, then I would be assessed a $360 motor vehicle "usage" tax. Seems high for a small used car that is 8 years old.


I would call an accountant in Louisville on the private IRA question. I am a bit younger (but have started to think about retirement). As far as I know, private IRAs are subject to the usual federal tax, but not local income tax.

Groceries are definitely not taxed at all, unless it is prepared foods (like the salad bar or the rotisserie chicken they cook for you, etc) Your basics are all tax free.

Total sales tax in Louisville is the same as the state of KY, which is 6% (lower than most states)

I have lived all over. I most recently moved to Louisville from FL. I transferred a registration and tag from FL to KY. I did NOT pay any 6% tax so not sure what that is. I only paid like 150 bucks and they gave me a new KY plate and registration and my car is much newer and nicer than yours. This year they charged me like 85 bucks. Unless you have like a Ferrari, your annual car tax will probably be under 100 bucks.

Property taxes are MUCH cheaper here than anyhwere I have lived, and so is car insurance and even health insurance, although outside Louisville, KY has a lot of unhealthy patients (and even in parts of Louisville).

Louisville has top notch hospitals for retirees and very cheap rents
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Old 05-03-2016, 07:28 PM
 
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I did look at the retirement benefits in KY, and it turns out that the state offers a nice deduction for retirees.

Kentucky collects income taxes from its residents at the following rates:

2% on the first $3,000 of taxable income.
3% on taxable income between $3,001 and $4,000.
4% on taxable income between $4,001 and $5,000.
5% on taxable income between $5,001 and $8,000.
5.8% on taxable income between $8,001 and $75,000.
6% on taxable income of $75,001 and above.


KY offers a retirement deduction of up to $41,110. It is not indexed to inflation, however. It includes public and private pensions and IRAs, and 401ks.
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Old 05-03-2016, 07:34 PM
 
417 posts, read 381,503 times
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Quote:
Originally Posted by Peter1948 View Post
I would call an accountant in Louisville on the private IRA question. I am a bit younger (but have started to think about retirement). As far as I know, private IRAs are subject to the usual federal tax, but not local income tax.

Groceries are definitely not taxed at all, unless it is prepared foods (like the salad bar or the rotisserie chicken they cook for you, etc) Your basics are all tax free.

Total sales tax in Louisville is the same as the state of KY, which is 6% (lower than most states)

I have lived all over. I most recently moved to Louisville from FL. I transferred a registration and tag from FL to KY. I did NOT pay any 6% tax so not sure what that is. I only paid like 150 bucks and they gave me a new KY plate and registration and my car is much newer and nicer than yours. This year they charged me like 85 bucks. Unless you have like a Ferrari, your annual car tax will probably be under 100 bucks.

Property taxes are MUCH cheaper here than anywhere I have lived, and so is car insurance and even health insurance, although outside Louisville, KY has a lot of unhealthy patients (and even in parts of Louisville).

Louisville has top notch hospitals for retirees and very cheap rents
Thanks for the good info!
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Old 05-03-2016, 09:12 PM
 
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Quote:
Originally Posted by olderandwiser456 View Post
Thanks for the good info!
Anytime I can help, let me know
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Old 05-04-2016, 05:40 PM
 
Location: NOVA
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Default Don't forget homestead exemption

For those over 65 who have primary residence in Kentucky, retired or not, qualify for a homestead exemption but only if you're owning a home vs renting. Over 50% of Louisville doesn't have a mortgage so lots of options to keep saving more if you're eligible for a homestead exemption.

https://jeffersonpva.ky.gov/property...ead-exemption/

I don't like to mention this but if tax avoidance, particularly if you're expecting to have a sizable income, then other states will be more advantageous for taxes. There is a whole forum on retirement with many threads analyzing which states are more advantageous for certain taxes.
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