How Do North Carolina's Taxes Stack Up?

If either relocation or retirement   or both   are on your mind, there are a large number of reasons to take a close look at the Southeastern states that hug the Atlantic shoreline.

The weather probably is at least close to the top of your list. Near the beautiful beaches of North Carolina, South Carolina, Georgia and Florida, snow and sleet are phenomena residents only read about in newspapers and hear about on television. However, if you prefer four distinct seasons and frozen precipitation now and then, the mountains of the western part of the Carolinas are a viable option.

If you feel the need to live within driving distance of a large and vibrant city and the entertainment, shopping and dining opportunities offered by a dynamic metropolis, the Southeast has much to offer in Atlanta, Charlotte and Jacksonville. If cities that helped frame the history of the United States are more your style, you should consider stately Savannah or historic Charleston. And if you prefer the solitude of rural life, the Southeast is generously sprinkled with a wide variety of small towns, from Arcadia to Barnwell to Milledgeville to Zebulon.

The most important factor in determining where to spend the rest of your life probably is economics. Before making a decision, you should look into the tax situation and the way states treat Social Security benefits and other pension distributions.

How does North Carolina stack up against the rest of the country when it comes to letting you keep as much of your money as possible? According to www.kiplinger.com, the Tarheel State could be a wise choice if you would like to decide how to spend your money, rather than leaving that decision to one government entity or another.

As an example, you don't have to pay state income taxes on the money you receive from Social Security, and retirement distributions from federal, state and local government pensions might also be excluded from state taxation, at least up to the $4,000 level. The state also lets you keep up to $2,000 in qualified pensions, military and otherwise, without taking any of it in state taxes.

North Carolina's state income tax ranges from 6 percent to 7.75 percent. Its state sales tax is 4.75 percent, which doesn't apply to prescription drugs or medical equipment. Food is subject to a 2-percent county tax, while counties can collect their own sales tax. North Carolina motorists pay more than the national average in gasoline taxes.

According to figures provided by The Tax Foundation, North Carolina's property taxes are relatively low. The state ranks 37th in median property taxes, 30th as a percentage of home value and 36th as a percentage of income. North Carolinians who are 65 or older or disabled get a substantial break on their property taxes.

The state does not collect an inheritance tax, while its estate tax, levied against the estate before the property is divided, is based on federal guidelines.


Tuesday, Dec 12, 2017  |  5:10 AM