Retiring? These States Won’t Tax Your Distributions

[Epoch-Times-Bot]

Retiring? These States Won't Tax Your Distributions

It can be difficult to afford retirement, especially when your retirement income is taxed.
In addition to taxing Social Security benefits, the federal government taxes income from 401(k) retirement plans, traditional IRAs, and pensions. Additionally, most states tax retirement income to some extent. A dozen states, however, do not tax 401(k)s, IRAs, or pensions, which are the most common types of retirement income.
Listed below are some highlights of how these funds are handled by those 12 states.
Retirement Income Tax Basics
Before going any further, let's quickly cover the basics of retirement income taxes.
Federal income taxes may be due on most retirement income. These include Social Security benefits, pensions, and distributions from IRAs and 401(k)s. There are some exceptions, such as withdrawals from Roth IRAs and Roth 401(k)s. It is the taxpayer's responsibility to pay federal income taxes on Roth contributions before they are made. If you reach the age of 59 ½, you can withdraw these contributions and any investment gains without paying federal income taxes....

Source: Retiring? These States Won't Tax Your Distributions

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