Now that the GOP tax bill sharply limits the deduction for state and local taxes, pre-retirees in high-tax states may ponder: Should I stay or should I go?
The final version of the "Tax Cuts and Jobs Act," which was released Friday, places a cap of $10,000 on the deduction filers can take for a combination of state and local income, sales and property taxes. This may be enough to get soon-to-be retirees living in New York, New Jersey and California thinking about relocating to Florida, Alaska and other tax-friendly locales.
"Many people in these high-tax states who are on the cusp of considering retirement will reconsider where they're living – and that changes everything, including your estate planning and retirement planning," said Martin M. Shenkman, a tax and estate planning attorney in Fort Lee, New Jersey.
Before you pack your bags, here are the four key taxes you should know about, and the states with the lowest rates.