The Foreign Service Journal, January-February 2014

82 JANUARY-FEBRUARY 2014 | THE FOREIGN SERVICE JOURNAL AFSA NEWS 2013 AFSA TAX GUIDE SOUTH CAROLINA Individuals under age 65 can claim a $3,000 deduction on qualified retirement income; those 65 years of age or over can claim a $10,000 deduction on qualified retirement income. A resident of South Carolina who is 65 years or older may claim a $15,000 deduction against any type of income ($30,000 if both spouses are over 65), but must reduce this figure by any retirement deduction claimed. Social Security is not taxed. Sales tax is 6 percent plus 1 percent in some counties. Residents aged 85 and over pay 5 percent. SOUTH DAKOTA No personal income tax or inheritance tax. State sales and use tax is 4 percent; municipalities may add up to an addi- tional 2 percent. TENNESSEE Social Security, pension income and income from IRAs and TSP are not subject to personal income tax. Most interest and dividend income is taxed at 6 percent if over $1,250 (single filers) or $2,500 (married filing jointly). However, for tax year 2013 and subsequently, those over 65 with total income from all sources of less than $33,000 for a single filer and $59,000 for joint filers are completely exempt from all taxes on income. State sales tax is 5 percent on food, 7 percent on other goods, with between 1.5 and 2.75 percent added, depending on juris- diction. TEXAS No personal income tax or inheritance tax. State sales tax is 6.25 percent. Local options can raise the rate to 8.25 percent. UTAH Utah has a flat tax rate of 5 percent of all income. For taxpay- ers over 65 there is a retirement tax credit of $450 for single filers and $900 for joint filers. This is reduced by 2.5 percent of income exceeding $25,000 for single filers and $32,000 for joint filers. See the state website for details. State sales tax is 4.7 percent; local option taxes may raise the total to as much as 7.95 percent. VERMONT U.S. government pensions and annuities are fully taxable. State general sales tax is 6 percent; local option taxes may raise the total to 7 percent (higher on some commodities). VIRGINIA Individuals over age 65 can take a $12,000 deduction. The $12,000 deduction is reduced by one dollar for each dollar by which Adjusted Gross Income exceeds $50,000 for single, and $75,000 for married, taxpayers. All taxpayers over 65 receive an additional personal exemption of $800. Social Security income is exempt. The estate tax was repealed for all deaths after July 1, 2007. The general sales tax rate is 5.3 percent (4.3 percent state tax and 1 percent local tax, with an extra 0.7 percent in Northern Virginia). WASHINGTON No personal income tax. State sales tax is 6.5 percent; rates are updated quarterly. Local taxes may increase the total to 9.6 percent. WEST VIRGINIA $2,000 of any civil or state pension is exempt. Social Security income is taxable only to the extent that the income is includable in Federal Adjusted Gross Income. Taxpayers 65 and older or surviving spouses of any age may exclude the first $8,000 (individual filers) or $16,000 (married filing jointly) of any retirement income. Out-of-state government pensions qualify for the $8,000 exemption. State sales tax is Ameriprise Financial Services, Inc. Member FINRA and SIPC. © 2013 Ameriprise Financial, Inc. All rights reserved. Take charge of your dream for a confident retirement. Call me today at 703.896.7956 to get started. Theodore S. Davis CFP®, CRPC® Private Wealth Advisor Davis and Devine A private wealth advisory practice of Ameriprise Financial Services, Inc. 4000 Legato Road, Suite 1100 Fairfax, VA 22033 theodore.s.davis@ampf.com ameripriseadvisors.com/ theodore.s.davis