Retirement Withdrawals May Be Subject to Federal and State Taxes

In many states withdraws from a traditionalretirement accounts are taxable at the federal level. Unfortunately, if you arenot living in one of the seven states without a state income tax the withdrawals from retirement accounts might be taxed at the state level as well. The seven states without income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Luckily, there are a few other states that do not tax withdrawals from retirement accounts and other states that just tax partial amounts. Each state has a variety of rules, which can getcomplicated. CPA specialist Jeffery Levine explains that “You have tokeep careful records, and it’s important to understand the rules of the stateyou’re in.” 

See Georgette Jasen, IRA Payout May Avoid State Income Tax, The Wall Street Journal, Jul. 7, 2013.

 Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.