Tool | August 2013
State-by-State Guide to Taxes on Retirees
State Sales Tax
7%. Prescription drugs, residential utilities, motor fuel, newspapers, health care services, and payments made by Medicare and Medicaid are exempt. Many counties and cities impose convention and tourism taxes on lodging and restaurant receipts.
Income Tax Range
Low: 3% (on less than $5,000 of taxable income)
High: 5% (on more than $10,000 of taxable income)
Social Security benefits are not taxed.
Exemptions for Other Retirement Income
Qualified retirement income -- including income from IRAs, 401(k)s, 403(b)s, Keoghs, and qualified public and private pension plans -- is exempt from state income tax. Interest income from federal securities and obligations of Mississippi and its political subdivisions are all exempt.
Single-family residential property is taxed at 10% of its assessed value. The state offers a homestead exemption of up to $300 for all eligible taxpayers. Median property tax on the state's median home value of $98,000 is $508, according to the Tax Foundation.
Tax breaks for seniors: For homeowners 65 and older or totally disabled, there is an exemption on the first $75,000 of value.
There is no inheritance tax or estate tax.
Editor's Picks From Kiplinger
- 6 Tax Factors to Consider When Picking a Retirement Destination
- States Differ on Retiree Tax Burden
- SLIDE SHOW: 10 Most Tax-Friendly States for Retirees
- SLIDE SHOW: 10 Least Tax-Friendly States for Retirees
- VIDEO: Tax-Friendly States for Retirement
- SLIDE SHOW: 10 Things You Must Know About Social Security
- SLIDE SHOW: 10 Things You Must Know About Traditional IRAs
- SLIDE SHOW: 5 Costly Retirement Surprises
- SPECIAL REPORT: Maximize Your Social Security Benefits
- ORDER: Kiplinger's Social Security Solutions
- TOOL: Kiplinger's State-by-State Guide to Taxes
- TOOL: Find the Best, Latest Mortgage Rates in Any State