As we've already discussed, Childfree Americans pay a lot of different taxes, and this includes those charged not just at the federal level, but also at the state and local level — so there's really no escaping taxes in some form or another.
Even if you move to one of the nine states that don't charge state income taxes — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — you'll have to pay into the state coffers in other ways.
Let's discuss a few tax considerations to make based on where you live.
Sales Taxes, Property Taxes, and Beyond
With 50 states (and Washington D.C.), there are a lot of tax laws to wade through.
Sales tax is a common way you'll be charged in most places; you're charged sales tax on many of the items you purchase, and if your income is less than $100,000 a year, you'll pay a higher percentage of that income in sales tax.
Five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) don't charge sales tax at all and make up income in other ways. For example, New Hampshire, which also doesn't charge income tax, has extremely high property taxes.
Property taxes can vary widely from state to state. To use a real-life example: Years ago, I moved from Connecticut to Mississippi. I was paying $12,000 per year in property taxes on a $450,000 home in Connecticut, but I owed just $1,200 a year on a property of the same price in Mississippi — even though that home came with more land and a lake!
What if you're a "snowbird" and maintain residency in more than one state, or even just like to live a nomadic lifestyle and frequently move around the country? State taxes of all kinds can get complicated fast.
Talk to a Professional
If you're considering moving states to pay less in taxes, it's best to consider your entire financial picture to decide.
You might want to think about how your retirement funds will be taxed when it's time to stop working, or how much tax you'll owe on large purchases like vehicles.
It's never a bad idea to talk to a tax professional or CERTIFIED FINANCIAL PLANNER® about planning for taxes and optimizing the percentage of your income you pay.
A Childfree Wealth Checkup with one of our Childfree Wealth Specialists is the perfect starting point as you're thinking about state-based taxes. Click here to learn more about this powerful 60-minute deep dive and schedule your Checkup today.
