Kathy & Ben
In November, 2018 Kiplinger’s rated Georgia’s taxes highly favorable for retirees. Below is article from Kiplinger’s.
One of Kiplinger’s top ten most tax-friendly states for retirees, the Peach State is a peachy tax environment for retirees. Social Security income is exempt, and so is up to $35,000 of most types of retirement income for those age 62 to 64. For those 65 and older, the exemption is $65,000 per taxpayer. The statewide sales tax is 4%, but jurisdictions may add up to 4% of their own taxes. Seniors may qualify for deductions from property taxes.
State Sales Tax – 4% state levy. Localities can add as much as 4.90%, and the average combined rate is 7.23%, according to the Tax Foundation. While the state doesn’t tax grocery food sales, localities can.
Income Tax Range – Low: 1% (on the first $1,000 of taxable net income for married couples filing jointly; on the first $750 for individual filers; and on the first $500 for married couples filing separately)
High: 6% (on taxable income over $10,000 for married couples filing jointly; on taxable income over $7,000 for individual filers; and on taxable income over $5,000 for married couples filing separately). The high rate will fall to 5.75% in 2019, and to 5.5% in 2020 if the governor and legislature reconfirm the reduction in that year’s legislative session.
No Taxes on Social Security
Social Security – Benefits are not taxed.
Exemptions for Other Retirement Income – Taxpayers who are 62 or older are eligible for a retirement-income exclusion. Retirement income includes pensions and annuities, interest, dividends, net income from rental property, capital gains, royalties, pensions, annuities, and the first $4,000 of earned income, such as wages. For married couples filing joint returns with both members receiving retirement income, the maximum adjustment may be up to twice the individual exclusion amount. The retirement-income exclusion is $35,000 for residents ages 62 to 64. For residents 65 or older, the exclusion is $65,000. Railroad Retirement income is exempt.
IRAs – Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.
401(k)s and Other Defined-Contribution Employer Retirement Plans – Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.
Exemptions on Pensions
Private Pensions – Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.
Public Pensions – Qualifies for retirement-income exemption of up to $35,000 or up to $65,000, depending on age.
Vehicle Taxes – Georgia levies a tax of 7% at registration. Electric vehicles are subject to a $200 annual licensing fee.
Inheritance and Estate Taxes – None.
Property Taxes are Senior Friendly in Georgia
Property Taxes – The median property tax on Georgia’s median home value of $152,400 is $1,413.
Tax breaks for seniors: For homeowners 62 and older who earn $10,000 or less, up to $10,000 of their property’s assessed value is exempt from school taxes.
People 62 or older whose family income does not exceed $30,000 may qualify for an exemption from state and county property taxes equal to the amount by which the assessed value of the home exceeds the assessed value for the preceding tax year (in effect, freezing their assessed value).
For those 65 and older who earn $10,000 or less, the homestead exemption is doubled, to $4,000. Many counties offer homestead exemptions that may be more beneficial to the taxpayer than the exemptions offered by the state.
Additional Senior Exemptions*
Additional Tax Exemptions – Some Georgia counties also provide an additional Senior Exemption, reducing the tax bill buying the county school tax portion. This will vary from county to county. These exemptions make owning a home easy in an Georgia Active Adult community. Learn more about the Senior Tax Exemption in Metro Atlanta.
*Red Hot Atlanta Homes provided the following information about Additional Tax Exemptions.