Financial Benefits of Moving to Texas
Texas is becoming a popular state to move to, especially among younger populations, for many reasons. With multiple metropolitan areas to choose from, an affordable cost of living, year-round warm weather and more, it is no wonder this state attracts thousands of people each year.
It isn’t just individuals flooding to this state—many companies are also jumping ship and relocating their headquarters to enjoy many of the benefits the state has to offer. The key to following suit is to establish domicile in Texas to show the state you’re willing to become a resident. Read more about that in our post, “As Companies Relocate to Texas, What are the Benefits for Their Employees?”
Texas Income Tax
One of the major benefits of living in Texas comes from the tax advantages that you can receive. The Longhorn State is considered among the most tax-friendly places to live in the United States. Texas does not have a state income tax, which means you get to take home more of what you make. The state constitution forbids personal income taxes and makes up for it through higher property and sales taxes.
However, if you’re moving from someplace like California where income is highly taxed, you’ll find this is a huge relief from what you’re used to experiencing. In addition, although property taxes are higher, property itself is often more affordable than in other large cities. This means you can invest in a bigger and nicer home in your new state. To learn more about relocating to a tax-friendly state, watch our Q&A video on this topic here.
Since Texas does not have a state income tax, you may also wonder about retiring in Texas and what Texas retirement taxes look like. Does Texas tax Social Security? We’re happy to share that this state does not. Because there is no state income tax, this also applies to retirement benefits. You will not be expected to pay any state taxes on Social Security benefits, withdrawals from retirement accounts, such as your 401(k) or IRA, or any public or private pensions. This makes Texas very tax-friendly toward retirees.
To get started on the process, you’ll need to learn about establishing a residency in Texas. This involves taking actions, such as buying property and changing your IDs and registrations, along with taking several other steps to show your intent.
If you are considering a move to Texas, be sure you understand what you need to do to establish domicile in Texas by downloading our checklist.
The views expressed are for commentary purposes only and do not take into account any individual personal, financial, legal or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. The opinions are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information.
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