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Nevada Retirement Tax Friendliness

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Overview of Nevada Retirement Tax Friendliness

Nevada has no state income tax, which means that all retirement income is tax-free at the state level. It also has relatively low property taxes, while the state sales tax is somewhat higher than average.

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You will pay of Nevada state taxes on your pre-tax income of
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Quick Guide to Retirement Income Taxes
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
  • Our Tax Expert

    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

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Nevada Retirement Taxes

Photo credit: ©iStock.com/Kajdi Szabolcs

If you’re searching for a great place to retire, Nevada may be a safe bet. It has an arid climate that receives 220 to 300 days of sunshine per year, depending on where in the state you live. Recreational opportunities in the Silver State abound. It has the most casinos of any U.S. state and many golf courses.

Nevada also has some of the lowest retirement taxes of any U.S. state. It has no state income tax, which means that all retirement income is tax-free at the state level. It also has relatively low property taxes, while the state sales tax is somewhat higher than average.

A financial advisor in Nevada can help you plan for retirement and other financial goals. Financial advisors can also help with investing and financial planning - including taxes, homeownership, insurance and estate planning - to make sure you are preparing for the future.

Is Nevada tax-friendly for retirees?

Nevada is extremely tax-friendly for retirees. Since Nevada does not have a state income tax, any income you receive during retirement will not be taxed at the state level. This includes income from both Social Security and retirement accounts.

Additionally, the average effective property tax rate in Nevada is just 0.53%. The average total sales tax rate is 8.23%. That is higher than the national average, but it is the only relevant tax that is higher in Nevada than in most of the rest of the country. Nevada has no estate or inheritance tax.

Is Social Security taxable in Nevada?

Social Security retirement benefits, even those taxed at the federal level, are not taxed in Nevada. In combination with the low cost of living in rural parts of the state, this can make it possible for many retirees in Nevada to use Social Security as their primary or only source of income.

Are other forms of retirement income taxable in Nevada?

Since Nevada does not have a state income tax, any income from a pension, 401(k), IRA or any other retirement account is not taxable. This can represent significant savings when compared to most other states, which generally tax at least some forms of retirement income.

How high are property taxes in Nevada?

Property taxes in Nevada are relatively low. A typical homeowner in Nevada spends almost $1,700 annually in property taxes. That varies significantly between counties, however.

In Eureka County, homeowners spend about $375 per year on property taxes, while in Douglas County a typical homeowner spends $2,091.

Does Nevada have any property tax exemptions for seniors?

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While there is no general property tax exemption for seniors, there are a number of specific programs from which some retirees may benefit. The exemptions available include a veteran’s exemption that is available to veterans who served in active duty during a recognized war period. There is also a disabled veteran’s exemption that is available to veterans with a service-connected disability of no less than 60%.

The blind exemption is available to Nevada residents whose vision is no better than 20/200 when wearing contact lenses or glasses. The surviving spouse’s exemption is available to homeowners whose spouse has passed away. This is equal to about $47 in savings.

How high are sales taxes in Nevada?

Sales tax rates in Nevada are somewhat higher than average. The statewide rate is 6.85%, which ranks seventh-highest among all U.S. states. However, local rates are relatively low, averaging slightly more than 1%. Combined, the overall state average is 8.23%.

Nevada has some important sales tax exemptions designed to benefit seniors. These include prescription drugs, durable medical equipment like wheelchairs and prosthetic devices, groceries and newspapers.

What other Nevada taxes should I be concerned about?

Nevada collects significant revenue through sin taxes on products such as alcohol and tobacco. The state’s gas excise tax is 23 cents per gallon.

Nevada does not have an estate tax or an inheritance tax.