To do list:
- Get a well-paying job
- Get your salary
- Pay taxes
Yeah, that doesn’t sound great, does it? Income taxes are a source of revenue for governments and if we want our home states to function properly, we have to pay up.
Living in a state that doesn’t tax your income and, by extension, your Social Security benefits or withdrawals from your 401(k) and IRA makes a lot of sense if you want to avoid paying extra taxes, but if that truly were the case, we’d all move to Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
So, why aren’t we? Well, one of the reasons why relocating here might sound like a good idea but could be detrimental is the fact that those states have other higher taxes that you’ll have to pay. In some cases, avoiding your income tax will help your finances but if you’re not careful, you may end up paying more.
That’s because all states require some sort of revenue for schools or roads, for example, so they’ll have other, higher taxes that residents will be required to pay. Before you make the move, consider these extra costs!