SmartAssetĭoes not review the ongoing performance of any Adviser, participate in the management of any user’sĪccount by an Adviser or provide advice regarding specific investments. Matching platform based on information gathered from users through our online questionnaire. ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our Services are limited to referring users to third party advisers registered or chartered as fiduciaries Securities and Exchange Commission as an investment adviser. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, If, for example, you have an investment property that you intend to sell during retirement, it’s important to remember than any gains made on that property will face tax rates of up to 5.75%. What other Virginia taxes should I be concerned about?Ĭapital gains in Virginia are taxed as regular income. Sales tax exemptions that could help retirees in Virginia include prescription drugs and most over-the-counter medicine. Groceries are not exempt from sales tax, but they do face a lower rate of 2.5%. Some places do have a 7% sales tax rate, though. Additionally, some counties and independent cities collect a tax of 0.7%, which means the total sales tax paid in most of Virginia will be either 4.3% or 6%. The general sales tax rate in the state is 4.3%. Virginia has among the lowest sales taxes in the country. How high are sales taxes in Virginia? Photo credit: ©/photohoo In many counties, low-income earners are entirely exempted from property taxes. Eligibility requirements vary by area, but, in general, seniors must be at least 65 years old. Most counties and independent cities in Virginia offer some form of property tax relief to seniors who own a home in their jurisdiction. What property tax relief is available to seniors in Virginia? In western Virginia, home values and property taxes are much lower, meaning most homeowners pay less than $1,000 each year. metro area, median home values are typically higher than $200,000 and most homeowners pay over $2,000 annually in property taxes. In the cities and counties that are part of the Washington, D.C. Property values in Virginia vary significantly between different parts of the state. The average effective property tax rate in Virginia is 0.75%. Above that limit, income is taxed at the rates shown in the table below. If total retirement income is less than $12,000, it is essentially tax-free. The deduction above can be applied to any retirement income, whether from a pension, 401(k) or IRA. The deduction phases out by $1 for every $1 that the taxpayer's federal AGI surpasses $62,000 for single filers and $87,000 for married filers. Virginia offers an age deduction of up to $12,000 for persons age 65 and older. Much of that income is also deductible, however. Income from retirement accounts like a 401(k) or an IRA is taxable, as is any pension income. Are other forms of retirement income taxable in Virginia? Some Social Security retirement benefits may still be taxed at the federal level, however. The state of Virginia exempts all Social Security income from taxation. Likewise, the average state and local sales tax rate is 5.63%, among the lowest in the U.S. Senior homeowners fare well in Virginia, as the state has very low property tax rates. Seniors who rely solely on Social Security and other retirement income totaling less than $12,000 do not have to pay state taxes on retirement income in Virginia. It also provides seniors with a deduction of up to $12,000 per year against all other forms of retirement income. It exempts all Social Security income from the state income tax. Virginia has a number of exemptions and deductions that make the state tax-friendly for retirees. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. As described below, Virginia’s sales taxes and property taxes are also quite low.Ī financial advisor can help you plan for retirement and other financial goals. Other types of retirement income, such as pension income and retirement account withdrawals, are deductible up to $12,000 for seniors. Social Security retirement benefits are not taxed in Virginia. Virginia also has relatively low retirement taxes. Retirees in Virginia can enjoy sandy beaches, one of the state’s 400 golf courses and a hike in the mountains, all in one weekend. It stretches from the Blue Ridge Mountains across the Chesapeake Bay to the Atlantic coast. The Commonwealth of Virginia is known for its rich history (eight presidents have hailed from Virginia) and diverse landscape. Virginia Retirement Taxes Photo credit: ©/omersukrugoksu
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