North Carolina is a great place to retire, with its beautiful beaches and mountains. But what about the taxes? Are they high or low? Let's take a look at the facts and figures to find out. North Carolina has a state sales tax rate of 4.75%, a maximum local sales tax rate of 2.75%, and a combined average state and local sales tax rate of 6.98%. Income from a pension, 401(k), IRA, or any other type of retirement account is taxed at the North Carolina state income tax rate of 5.25%.
Other taxes North Carolina seniors and retirees may have to pay include state sales and property taxes, which are moderate compared to the average for all states. North Carolina has seen a decade of conservative leadership, resulting in a reduction of the tax burden on its citizens. Social Security retirement income can be subtracted from your taxable income when you file your North Carolina tax return. Retirees with investment income outside of a retirement account should know that capital gains in North Carolina are treated as regular income.
Seniors with significant income from sources other than Social Security will have a higher tax bill in North Carolina. North Carolina also imposes a tax on the use of personal property, digital property, and some services purchased out of state for use in the state. Sales taxes in North Carolina have a base rate on goods and some services of 4.75%, and most counties add another 2% or more to local taxes. Overall, North Carolina has relatively low taxes compared to other states.
The state does not use other taxes, such as property taxes and general sales taxes, which many states use to supplement their gasoline tax money. This means that retirees living in North or South Carolina enjoy a reasonable fiscal climate compared to the rest of the nation. In conclusion, North Carolina has relatively low taxes compared to other states, making it an attractive place for retirees to settle down. With its beautiful beaches and mountains, it's no wonder why so many people choose to retire in North Carolina.