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June 2011

10 Tax-Friendly States For Retirees 2011

#6 GEORGIA

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State Income Tax: 1%-6%
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No

Georgia offers a peachy tax environment for retirees. Social Security income is exempt from taxes and so is up to $35,000 per person of most types of retirement income, including pensions, annuities, rental income, interest, dividends and capital gains for residents 62 and older. Beginning in 2012, taxes on all retirement income will be phased out completely. Remaining income is taxed at rates ranging from 1% to 6%, with the top tax rate kicking in on income in excess of $7,000. The statewide sales tax is 4%, but local jurisdictions can add up to 4% of their own taxes. Food and prescription drugs are exempt from sales taxes. Full-time residents of the Peach State qualify for a homestead exemption, and residents 65 and older may qualify for additional property tax deductions.