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Old 04-16-2009, 08:01 PM
 
Location: Blue Ridge Mtns of NC
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Property Taxes

Under the homestead exemption, the greater of $25,000, or 50% of the appraised value of real property owned by a North Carolina resident and occupied by the owner as his or her permanent residence is excluded from the taxpayer's assessment, if the following requirements are met:

(1) The owner is 65 years of age or older or is totally and permanently disabled.

(2) The disposable income of the owner did not exceed $25,000 for calendar year 2008. The 2009 limit is $25,600. The income eligibility limit is adjusted each year by the Social Security cost-of-living adjustment. The disposable income limit amount includes all moneys received plus the disposable income of the applicant's spouse if they reside together.

The state also has a circuit breaker property tax deferment program. Under this program, taxes for each year are limited to a percentage of the qualifying owner's income. The qualifying owner must either be at least 65 years of age or be totally and permanently disabled. For an owner whose income amount for the previous years does not exceed the income eligibility limit for the current year, which for the 2009 tax year is $25,6000, the owner's taxes will be limited to 4% of the owner's income. For an owner whose income exceeds the income eligibility limit, which for tax year 2009 is $38,400, the owner's taxes will be limited to 5% of the owner's income.
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Old 04-16-2009, 08:46 PM
 
Location: State of Being
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I am not sure where the info would come from that NC is tax friendly to retirees, b/c it isn't. SC is more tax friendly. FL and TX have much better tax laws, including homesteading provisions that far surpass NC's.
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Old 04-16-2009, 09:23 PM
 
Location: State of Being
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Here is some more info on taxation in each state.

The states w/ the lowest overall tax burden are: Alabama, Tennessee, Delaware, New Hampshire and Alaska. But there are all sorts of variations on what makes up those taxes.

For example - will you be receiving a pension? Will you receive dividends? If so, look for a state that doesn't tax your pension and dividends (or taxes only a portion) Then consider other factors - everything from property taxes to car registration taxes/fees, to retail tax.

Most tax-friendly states for retirement

Other things you will want to consider are - what types of special services, if any, are available? Mass transit? Healthcare? Cost of heating/cooling your residence? Price of gas (can vary b/c of taxes per state). Cost of food?

Also, what are the rules if you (or your spouse, if married) needs to go into a nursing home and you want to use medicaid benefits?

Assets are either exempt or nonexempt for Medicaid purposes. Most of the patient's nonexempt assets must be used to pay for nursing home care or other allowable expenses before Medicaid benefits are available. The patient can keep up to $2,000 worth of nonexempt assets. The rest must be spent down or converted to exempt assets before the patient qualifies for Medicaid nursing home benefits. Exempt assets are not counted. Property that is not exempt must be spent down until the patient's nonexempt assets are valued at $2,000 or less before the patient qualifies for Medicaid benefits.

Each state has its own rules.

You can read all the details for NC here:

Planning Your Estate -- Medicaid Eligibility for Nursing Home Benefits
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Old 04-17-2009, 12:14 PM
 
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The best gig in NC is if you have a government pension it is totally free of state income tax. That is very significant since the state income tax ranges upwards of 6%. However, this is not true for pensions from a private corporation, which are fully taxable.
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Old 04-17-2009, 12:31 PM
 
Location: State of Being
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Quote:
Originally Posted by thejersey3 View Post
The best gig in NC is if you have a government pension it is totally free of state income tax. That is very significant since the state income tax ranges upwards of 6%. However, this is not true for pensions from a private corporation, which are fully taxable.
True - it depends on what type of gov't job. For military, it can be helpful to get those deductions, but they are not as impressive as some other states have (unless you meet the restriction of dates of service). A lot of our military friends retired in Kansas, b/c that state allows total exemption.

For NC: Full exemption for persons with five years of creditable service as of August 12, 1989; otherwise a deduction of up to $ 4,000 ($ 8,000 for joint filers) is allowed (N. C. Gen Stat. § 105-134. 6 and North Carolina Department of Revenue at http: //www. dor. state. nc. us/taxes/individual/benefits. html)

For SC: Military retirement for service in the National Guard and Reserves for state or federal service is fully exempt; up to $ 10,000 is exempt for service in any other military component for taxpayer over age 65 and $ 3000 for tax payers under age 65

South Carolina Department of Revenue at http: //www. sctax. org/default. htm
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Old 04-17-2009, 01:01 PM
 
Location: North Carolina
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Quote:
Originally Posted by thejersey3 View Post
The best gig in NC is if you have a government pension it is totally free of state income tax. That is very significant since the state income tax ranges upwards of 6%. However, this is not true for pensions from a private corporation, which are fully taxable.
thejersey3 - That's exactly what I did! Thanks to NC's Supreme Court for the Bailey Decision which exempts all federal pensions and NC State pensions. I was eyeing SC a few years back, until I came across that little gem, so I then set my sights a bit northward. NC's highest tax rate starts at around 60K which can take a large bite out of private pensions and large state pensions from outside of NC. It can effectively negate property tax savings over other states if you're in a high-income bracket.
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Old 04-17-2009, 01:11 PM
 
79 posts, read 329,423 times
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Quote:
Originally Posted by TheEmissary View Post
thejersey3 - That's exactly what I did! Thanks to NC's Supreme Court for the Bailey Decision which exempts all federal pensions and NC State pensions. I was eyeing SC a few years back, until I came across that little gem, so I then set my sights a bit northward. NC's highest tax rate starts at around 60K which can take a large bite out of private pensions and large state pensions from outside of NC. It can effectively negate property tax savings over other states if you're in a high-income bracket.
Yeah, both sets of my parents are enjoying the same benefit. Mr. Bailey should be put on a pedestal. I think NJ does allow some exclusion for any pension but not the full amount.

Unfortunately for me, I'm in the "negate-savings" category here. The property tax savings was wiped out by the huge state income tax.
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Old 04-17-2009, 01:11 PM
 
Location: NE Charlotte, NC (University City)
1,894 posts, read 6,057,412 times
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Quote:
Originally Posted by anifani821 View Post
I am not sure where the info would come from that NC is tax friendly to retirees, b/c it isn't. SC is more tax friendly. FL and TX have much better tax laws, including homesteading provisions that far surpass NC's.
Yes, but a house in Florida will (or at least did) cost you double or triple what a comparable house here would cost you...so that homestead exemption was nearly worthless in terms of money saved in your pocket. Now, who knows what's going to happen after the real estate dust settles down there...but I doubt house prices will ever return to earth down there, even with the huge hit they're taking right now. Add to this, the 4x-10x cost of home insurance (depending on how close you are to the coast), a $300-$400 power bill for 11 of the 12 months for AC, and it's not quite as senior friendly as one may think.
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