There’s nothing more frustrating than working a 40-hour week only to give away a major chunk of your income weekly and annually to municipal and federal government agencies. Taxes are an important facet of life, paying for valuable services that make community life better. However, the tax burden residents of some states face is too heavy to carry for most. For those who love a wise approach to tax policy, Delaware is the place to be.
A Great State for Retirees
Kiplinger.com rated Delaware among the top-ten states for retirees (#6) in 2015. For starters, individuals retiring in the state with family they wish to pass on assets to after death can rest assured knowing that their full inheritance will go to their loved ones. There is no inheritance tax on assets, assets left to a surviving spouse are exempt from taxes, and the maximum estate tax rate is 16%.
Further, the state’s income tax is just 2.2% on earnings between $2,001 and $5,000. Those earning an income above $60,000 face a moderate 6.6% income tax. Beyond that, taxpayers 60 and older can exclude $12,500 of income from any IRA, 401k, or pension from state taxes.
Modest Income Taxes Across the Board
It isn’t just the low-income, part-time employee or retiree who can expect to save on income taxes in the state of Delaware. State officials use a six-tiered bracket to establish state income tax guidelines. Any income under $2,000 is exempt from state income tax. That rises as follows, according to Bankrate.com:
• The aforementioned 2.2% on $2,001 to $5,000
• 3.9% on $5,001 to $10,000
• 4.8% on $10,001 to $20,000
• 5.2% on $20,001 to $25,000
• 5.55% on $25,001 to $60,000
• The aforementioned 6.6% on all income above $60,000
Low Property Taxes
Delaware has one of the lowest property tax rates in the United States, and is 10% lower than many of its neighboring states, such as New Jersey. In fact, Sussex County, Delaware is tied for the second lowest ratio of median annual property tax to home value for all US counties. There are few places in the country where the percentage of your home’s value devoted to property taxes are lower.
Excellent Business Climate
Last but not least, Delaware’s approach to income taxes creates a favorable climate for business in the state. There is no state corporate income tax for companies formed in Delaware, but not conducting business transactions there. Additionally, there is no personal income tax for non-residents of Delaware living and working in the state.
If you’re looking for a great place to call home, where you can save more of your hard-earned money, Delaware just might be the place for you.