The Foreign Service Journal, February 2013

60 FEBRUARY 2013 | THE FOREIGN SERVICE JOURNAL AFSA NEWS receives more than one federal pension, the exclu- sion applies to each pension or annuity separately. Social Security is not taxed. RHODE ISLAND U.S. government pensions and annuities are fully tax- able. Sales tax is 7 percent. 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 deduc- tion 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 per- cent plus 1 percent in some counties. Seniors 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 additional 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 per- cent if over $1,250 (single filers) or $2,500 (married filing jointly). However, for tax year 2012 and subse- quently, those over 65 with total income from all sources of less than $26,200 for a single filer and $37,000 for joint filers are completely exempt from all taxes on income. State sales tax is 7 percent with between 1.5 and 2.75 percent added, depend- ing on jurisdiction. 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 taxpayers 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 Web site 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 percent (4 percent state tax and 1 percent local tax). WASHINGTON No personal income tax. State sales tax is 6.5 percent; rates are updated quarterly. Local taxes may increase the total to 9.5 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 6 percent. WISCONSIN Pensions and annuities are fully taxable. Those age 65 or over may take two personal deductions totaling $950. Benefits received from a federal retirement system account established before Dec. 31, 1963, are not taxable. Wisconsin does not tax Social Security benefits included in Federal Adjusted Gross Income. For tax years after 2009, those over 65 and with an FAGI of less than $15,000 (single filers) or $30,000 (joint filers)may take a $5,000 deduction on income from federal retirement systems or IRAs. State sales tax is 5 percent; most counties charge an extra 0.5 percent. AFSA TAX GUIDE online at www.afsa.org/ afsa_tax_guide. aspx 2012 TAX GUIDE