Overview of Wyoming Retirement Tax Friendliness
Wyoming does not have its own income tax, which means the state will not tax any form of retirement income. This includes Social Security retirement benefits. Property taxes and sales taxes in Wyoming are also among the lowest in the country.
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Wyoming Retirement Taxes
For retirees, Wyoming has it all. It is filled with beautiful scenery, including the world’s oldest national park, Yellowstone. And on top of that, Wyoming has some of the lowest retirement taxes in the country.
Why are Wyoming’s retirement taxes so low? For starters, there’s no state income tax in Wyoming. That means no tax on retirement income like Social Security benefits or 401(k) withdrawals.
Additionally, Wyoming’s other taxes are quite low. The state’s average property tax rate is among the 10 lowest in the U.S., as are the state and local sales taxes in Wyoming. In short, if you’re retiring in Wyoming, you can expect your overall state and local tax burden to be low in comparison to other states.
A financial advisor in Wyoming can help you plan for retirement and other financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, insurance and estate planning, to make sure you are preparing for the future.
Is Wyoming tax-friendly for retirees?
Wyoming may be the most tax-friendly state south of Alaska. It does not have its own income tax, which means all forms of retirement income will not be taxed at the state level. The average effective property tax rate in Wyoming is just 0.57%. The state and average local sales tax rate is 5.39%. Wyoming has no estate or inheritance tax.
Is Social Security taxable in Wyoming?
Wyoming does not tax Social Security retirement benefits, even those taxed federally. Wyoming’s cost of living is slightly lower than the national average, so it may be possible for some retirees to live off Social Security alone, especially in the less expensive parts of the state.
Are other forms of retirement income taxable in Wyoming?
Wyoming does not tax any income. That means withdrawals from a 401(k), IRA, 403(b) or any other type of retirement account will not be taxed at the state level in Wyoming. Likewise, pension income is tax-free in Wyoming. Remember that federal taxes will still be owed on these other types of retirement income, though.
How high are property taxes in Wyoming?
Wyoming’s average effective property tax rate is 0.57%, which is the 10th-lowest rate in the U.S. That means homeowners pay about $570 in property taxes annually for every $100,000 in home value.
Budget-conscious retirees will likely be able to find an affordable place to live in Wyoming, where housing costs are generally very low.
In fact, median home values in Wyoming range from about $150,000 in the cheapest parts of the state up to $270,000 in more expensive areas. The one exception is Teton County, which contains all of Grand Teton National Park and 40% of Yellowstone National Park. The median home value there is a whopping $827,400.
How high are sales taxes in Wyoming?
Wyoming’s sales taxes are very low. The total rate, including the state rate and the average of all local rates, is 5.39%.
Groceries are exempt from sales taxes, though food costs in Wyoming are about 10% higher than the national average. Prescription drugs and medical equipment are also exempt from sales tax.
What other Wyoming taxes should I be concerned about?
Wyoming has no other major taxes that will significantly affect seniors and retirees. It does not have an estate or inheritance tax. Like all other states, it does have excise taxes on alcohol, cigarettes and gasoline, but those are all fairly low.