States Without Income Tax can Save You a Bundle of Money
States without income tax are out there waiting for you to find them. I suggest you carefully consider relocating to a state that does not burden its residents with income taxes. Enjoy a renewed sense of financial freedom by becoming a resident of one of the tax free states.
There are only a handful, and they have a wide range of climates and locations around the country. If you are interested in how to avoid taxes, then this is a legal way to do it, and it supports frugal living.
The states without income taxes are: Florida, Wyoming, Alaska, Washington, Tennessee, New Hampshire, South Dakota, Nevada, and Texas. Note: New Hampshire and Tennessee tax interest and dividends, but they do not tax wages.
How much of a difference in your paycheck would it make to live in one of the tax free states? Could you save money? Would it be worth it?
It might make quite a difference. Let’s look at an example. In 1998 I moved from California to Wyoming. That move cost me about $1,200 for the truck rental.
Wow, that's a lot of money to move. Yes, but it saved me well over $660 a month in state income taxes. The cost of the truck was made up for in less than two months because I moved to one of the states without income tax.
Now that sounds like a significant amount of money each month, and it gets even better. The money saved now adds up to $80,000. Okay, now I would say that is thrifty living.
Let me say that again but in different terms. By choosing to live in one of the states without income tax, I could have:
- Paid cash for a new motorcycle each year for the last 10 years.
- Purchased a new car every 2 and 1/2 years just by writing a check.
- Had a huge down payment on a house, and well on my way to being mortgage free.
- Purchased dozens of acres of land in a nice area as a future home site.
- Invested at a modest rate of return and had about $115,000 today.
At about $8,000 a year savings for me, this just can’t help but be the best of the frugal living tips.
You can probably see that income taxes are a burden that you might want to consider getting away from. If you don't know how to avoid taxes on paper, you can at least diminish them by moving to one of the states without income tax. Even moving to a state with a lower income tax will help.
Remember, government consumes wealth. There is no sense allowing a state government to consume more of your wealth than what you think is reasonable.
I can’t imagine ever moving to a state where you pay high income tax. This frugal living tip offers a long term solution to saving money by relocating to a place where, just by being a resident, you can keep more of what you earn.
Done with States Without Income Tax, take me back to Frugal Living Tips