Mississippi is VERY favorable for retirees when it comes to taxes.
In fact, it’s going to incredibly hard to beat the great state of Mississippi in terms of the taxes retirees pay.
Let’s start with income tax. Yes, Mississippi has an income tax. And so many people will overlook the state for retirement. BIG MISTAKE!
Mississippi exempts ALL retirement income from tax, not only Social Security but IRA, 401ks, 403bs, TSP and pensions. Are all exempt from taxation!
That is amazing. Think about it, you have $50k in Social Security and $50k in pension/IRA distributions. You pay ZERO tax. That’s right, NOTHING.
Again, just shows you have to look beyond the top line tax rate.
“Oh, but Josh, they have a high state sales tax of 7%, which is the 2nd highest in the nation,” you say.
Nope. You need to look beyond that top line rate too. Because in Mississippi only two localities have an additional tax. So, all in all, Mississippi is only the 21st highest sales tax state in the union.
Lastly, retirees have a large $75k homestead exemption for their property tax. The median value in Mississippi is all of $104k so someone with a median home value will pay property tax on only $29k. And then the tax rate is .64%.
Take the totality of income, sales and property, on top of adding low property values and like I said, it’s going to be hard to beat Mississippi when it comes to taxes for retirees.