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I saw this on the TN forum and it seems to say above a certain total income the person is responsible for taxes on interest, etc at 6% tax level. effective 2014. If I am reading this correctly if retirees have social security and anything much else they will easily exceed that exemption level.
I saw this on the TN forum and it seems to say above a certain total income the person is responsible for taxes on interest, etc at 6% tax level. effective 2014. If I am reading this correctly if retirees have social security and anything much else they will easily exceed that exemption level.
can someone tell me if my understanding is off on this?
You are if you are thinking that you are paying tax on your 401k or IRA. Those are qualified plans and are not subject to that tax. Please read here Taxes by State: New York to Wyoming
I'm not from TN, but looking at the TN tax form at http://www.tn.gov/revenue/forms/indinc/inc250.pdf
it appears that even if your "total income from all sources" is over the 33K/59K thresholds, the only thing being actually taxed is income from certain types (not all) of interest and dividends. Not your actual retiree income such as SS, pension, IRA w/d, etc. Those are only added up to see if you are over the threshold, then the 6% is figured on certain interest and dividends
I'm not from TN, but looking at the TN tax form at http://www.tn.gov/revenue/forms/indinc/inc250.pdf
it appears that even if your "total income from all sources" is over the 33K/59K thresholds, the only thing being actually taxed is income from certain types (not all) of interest and dividends. Not your actual retiree income such as SS, pension, IRA w/d, etc. Those are only added up to see if you are over the threshold, then the 6% is figured on certain interest and dividends
No income tax on IRA 401K and pensions. Those are qualified plans and are not counted in the threshold. The tax is on regular savings and bond funds not part of a retirement savings plan.
thanks, that sounds better to my retiree ears but it makes me wonder how much the state is actually gaining from this law. I'm sure all they need...
It actually is a tax that really taxes most on the wealthy and does not really affect the average and low income folks.
Even regular checking account, saving account and cd interest is exempt from the tax. Bond interest is tax free if it is a TN based bond (state or TN municipality, etc.) so that also allows one to invest in bonds with the interest tax free and benefits the state. And yep, retirement accounts are exempt from the tax.
I am guessing that some of the music industry folks contribute significant $ to the state from this tax.
Here's a guide for who must file and what is taxable. Basically interest and dividends only to the extent that they (the dividends and interest) exceed $1250 filing single or $2500 filing jointly.
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