Don’t Overlook State Tax Impact in Retirement Plans

All of those Florida “snowbirds” have the right idea, according to attorney Bruce Steiner. With state taxes rising, planning to minimize states taxes has become a critical part of the retirement planning process, Mr. Steiner notes in a recent article in CCH’s Journal of Retirement Planning. In 1996, Congress opened up the way for retirees to reduce their retirement tax burdens by moving to a state with a lower (or in some cases nonexistent) income tax. Steiner notes that research up front for clients’ retirement years could reduce or eliminate the state tax bite on retirement savings. He also points that the planning should also extend to the estate planning side as beneficiaries of a qualified plan or IRA could see their taxes reduced through the use of a trust as the beneficiary of the qualified plan or IRA.

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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.

Read this article from CCH’s Journal of Taxation of Financial Products.


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