TAX question

[justme]

I’m looking to move back to New England, now that I’m retired. Taxes are a large concern for me. I have a modest income from SS and investments that I have built up over time to fund my retirement. I will be buying a home to be near my kids and grandkids and will travel in the winter in my motor home (Snow birding). My question is how much can I expect to pay in taxes for SS, IRA and 401K distributions, property tax on a home ($250K) motor home ($200K) and automobile ($20K). I presently live in Illinois where these taxes are low for me and I was would not like to pay more than I’m paying now. Illinois is tax friendly towards retired folks and I’m wondering if New Hampshire is as well.

Any help that you folks could provide would be appreciated. I emailed these questions to your state and local governments, but they have not replied.

[jrc]

I was hoping someone with more definitive answers could help out, but I'll try. As I said in another thread, NH taxes are generally lower than the rest of the country. But they seem to be more friendly to people building a nest-egg than people living off their nest-egg. NH has no tax on income, no sales taxes and no tax on capital gains. But it does tax interest and dividends, 4% or 5% if I remember correctly. I think SS, 401K and IRA payouts are not taxed at the state level. Home property taxes range from 2% to 3.5% a year depending on the town. Automobile taxes are buried in the registration fees, they start at 1.8% for a new car and go down fast as the car gets older. Don't have a clue on motorhomes but you can search here:

http://www.gencourt.state.nh.us/rsa/html/indexes/search.html

[DRH]

JRC's right, NH taxes dividend and interest income at 5.0%. Personal "earned income" and capital gains are not taxed.

[fatlazyless]

If you own a house in NH, you can expect to pay from 3-5%/year in property tax. The assessed value is now becoming close to what it's really worth as assessments now have to be done every five years or so where before 2001 assessment could go for twenty years before being reassessed. NH is a great state for big earners with large incomes, pensions or capital gains as none of these get taxed by the State of NH. However, if you go buy a chicken salad sandwich on a bulkie for $2.99 at the grocerie store, you pay an 8% tax of 24 cents. So, make 200k and pay no NH tax but buy a chicken sandwich, pay 8%. The State taxes those of us who are too lazy to make our own sandwiches and rewards earned income by having no state income tax. The State raises most of its' money on the local level by having every town tax property at a different local rate. The local property tax raise moe than the Real Estate Excise, hotel & meals, or dividends & interest. There is no State income or capitol gains tax, yet, but just wait about five years and this will change!

[SIKSUKR]

Wow FLL! How do you come up the 3-5%/year tax on property?A $300,000 house at those rates would be $9,000-$15,000 a year.Am I reading your post correctly?In my case in southern NH(Bedford) A $300,000 property was taxed at less than $4,000.That comes out to about 1.3%. SS

[jrc]

FLL,
I thought you were way out of whack with 3-5% but according to this link some towns do exceed 4%.

http://www.nh.gov/revenue/property_tax/2003/2003_tax_rates.htm

You're sandwich example might be a little misleading. NH has an 8% rooms and meals tax. Very few items in a grocery store are taxed, just items purchased like a restaurant. Of course if you eat in restaurants a lot that 8% can make a big dent in the budget.

[jrc]

http://www.nh.gov/revenue/gti-rev.htm

[fatlazyless]

Towns like Bedford, Rye, Sunapee, Moultonboro, & Waterville Valley (which spends $19000./student in its' 38 student elementary school) all have low percentage rates. Their taxable property base is high in comparision to the needs and wants of the town so the rate is relatively low; maybe as low as 1%. Towns like Plymouth, Laconia, Claremont and Whitefield are on the other end. Their assessed property tax base is low for their local school, fire, poice, roads & other town expenses so their percentage rate is high; maybe as high as 5%.

Fact:The State of New hampshire gets more tax money out of one $2.99 baloney & american cheese sandwich than it gets all year long from a capital gains tax on Craig Benson's stock market portfolio which is worth maybe $500,000,000.

[SIKSUKR]

Maybe your talking 3% of "assessed" value but I'm pretty sure there are very few towns which would tax at 3-5% of"market"value.Those are some huge numbers. SS

[fatlazyless]

Hi - I haven't got the time to research this now but I can remember seeing Plymouth real estate listings a few years back where I think the prop taxes were 4 percent-plus. Later...

[Just Sold]

This article was forwarded to me by one of my work associates. I hope it clarifies some of your question.

Friday, September 10, 2004

Study: Tenn., N.H. have lowest tax burdens in nation, Maine among highest
NASHVILLE, Tenn. (AP) — Tennessee had the lowest state and local tax burden in the United States in 2002, according to a survey by the Massachusetts Taxpayers Foundation. New Hampshire had the second-lowest burden.
The foundation ranked tax burden per $1,000 of personal income, which foundation president Michael Widmer said he believes is a more accurate reflection than a per capita assessment.
According to the foundation’s figures, the total burden of state and local taxes per $1,000 of personal income in Tennessee was $83.39, or 50th in the nation.
New Hampshire’s total burden was $84.65, or 49th in the country.
The rest of the bottom 10, from 41st to 48th, were South Carolina, Texas, Virginia, Florida, Colorado, Oregon, South Dakota and Alabama.
The top 10 were New York ($130.79), Maine ($130.16), Wyoming ($121.97), Hawaii ($120.62), Wisconsin ($117.26), Rhode Island ($113.63), Minnesota ($113.14), West Virginia ($111.68), New Mexico ($111.45) and Louisiana ($111.26).
"Without any question, Tennessee is a very low tax state compared to the rest of the nation," Widmer said.
Tennessee ranked near the bottom in all tax categories studied, except sales and excise taxes. In that category it had the ninth-highest burden in the nation. Tennessee depends heavily on the sales tax, which is 6 percent on food and 7 percent on most other items.
New Hampshire and Tennessee are among nine states without broad-based personal income taxes, but have limited taxes on some interest and dividend income. New Hampshire depends heavily on local property taxes and a state property tax earmarked for education.
———
On the Net:
Massachusetts Taxpayers Foundation: http://www.masstaxpayers.org

[fatlazyless]

Yes, but New Hampshire is not really a state, it is a collection of independant cities & towns. Most tax money is raised locally and not at the state level. Overall, the State of NH may be 2nd lowest, but there are big differences between the towns within the state. Waterville Valley can spend $19000./student and has become a magnet for special needs students. Laconia & Plymouth probably spend about $6000./student, but that's a guess. Same state, different towns, different spending and different percentage of assessessed prop value taxed.

[justme]

Thanks for taking the time for relpy.