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TotallyRetired  
#41 Posted : Thursday, June 6, 2013 5:03:06 AM(UTC)

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Agree that NC is an attractive place to retire.

For retirees who expect to be gone a lot (i.e. visiting the grandkids, seeing the world, RVing out west), owning real estate might not be the best option.
Skippy1134  
#42 Posted : Thursday, June 6, 2013 5:56:38 AM(UTC)

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We bought a place on the Carolina coast three years ago and just last month sold our Maryland house. We'll be making a major downsize from 3 acres and over 4000 square feet!! We should have a very minimal mortgage in NC we hope to pay off quickly. Didn't quite make my goal of being mortgage free to start. Overall lower cost of living anyway, and the tax exemption of my retirement and TSP is a huge bonus compared to Maryland. Even if they change the tax laws in NC we should still be in better shape.
TotallyRetired  
#43 Posted : Thursday, June 6, 2013 6:10:25 AM(UTC)

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By lower cost of living, do you mean that real estate is much less expensive than in Maryland?

I have lived in Maryland & am aware that real estate costs about twice as much as in many other places.
Skippy1134  
#44 Posted : Thursday, June 6, 2013 8:20:06 AM(UTC)

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Real estate, property taxes, insurance (even on the on the coast with flood and wind), having work done, etc.   Sales tax is a bit higher, except on beer where it is higher in Maryland, which I find a personal affront. Add to that the income tax savings on my annuity and the TSP. NC does have property tax on cars, etc.

And I won't even talk about Maryland's flush tax, increases in property tax, rain tax, increases in gas tax.....something like 40 taxes and fees have increased under the current Governor.
martyb  
#45 Posted : Thursday, June 6, 2013 10:50:57 PM(UTC)

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Hey Skippy, if your Carolina place is anywhere near the SC state line, you can cross into SC to buy gas. SC has much lower taxes on gas than NC. I pass through SC on my way home to NC, and I make it a point to fill up just before crossing the state line. martyb2013-06-07 06:56:50
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Skippy1134  
#46 Posted : Thursday, June 6, 2013 11:28:10 PM(UTC)

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martyb wrote:
Hey Skippy, if your Carolina place is anywhere near the SC state line, you can cross into SC to buy gas. SC has much lower taxes on gas than NC. I pass through SC on my way home to NC, and I make it a point to fill up just before crossing the state line.


Probably not worth it, a couple of hours away.

I do need to make a run to Myrtle Beach to pick up some Banks Beer. They don't distribute it in NC yet....
Jim Hanrahan  
#47 Posted : Friday, June 7, 2013 3:50:00 AM(UTC)
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The NC House tentatively approved bill H998 on Friday in a 72-32 vote.
The final House vote is expected Monday.

Three proposed amendments were tabled (not enacted):
ATDx-52 [v.12]
- income tax rate for portion over $1,000,000 (married)/$500,000 (single) to 6.9%
- under $1,000,000/$500,000 taxed at 5.9%
- extension of the earned income tax credit expiration from 2014 to 2019

ATDx-54 [v.12]
- income tax rate for portion over $1,000,000 (married)/$500,000 (single) to 7.75%
- under $1,000,000/$500,000 taxed at 5.9%
- extension of the earned income tax credit expiration from 2014 to 2019

ATDx-55 [v.12]
- income tax rate for portion over $1,000,000 (married)/$500,000 (single) to 7.75%
- under $1,000,000/$500,000 taxed at 5.9%

Link to H998EngineerJim2013-06-07 11:56:44
martyb  
#48 Posted : Friday, June 7, 2013 3:51:49 AM(UTC)

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My hometown is 112 miles (inland) to MB . I used to go there all the time as a teenager, and took my girls there when they were younger. Haven't been in awhile. I'd like to tell you about a great restaurant at N. Myrtle Beach that was open for years, but it finally closed. If you like seafood, you're in the right place!martyb2013-06-07 11:58:31
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Jim Hanrahan  
#49 Posted : Friday, June 7, 2013 4:08:11 AM(UTC)
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The fiscal impact document for H998 shows the changes to the way electricity and natural gas will be taxed.
Repeals the gross receipts tax on electricity, but makes it subject to the full sales tax rate.
Repeals the excise tax on piped natural gas, but makes it subject to the full sales tax rate.

The net effect is an increase in revenue (tax).

This document also shows that property tax (and mortgage interest) up to $25,000(married)/$12,500(single) can be used as an itemized deduction. If I read the site correctly, the current bill is version 3 (click Edition 3) and it includes the property tax.EngineerJim2013-06-07 12:20:08
TotallyRetired  
#50 Posted : Friday, June 7, 2013 4:37:18 AM(UTC)

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The proposed standard deduction for a couple will be raised to $12,000.

This is good news for retirees (like Skippy) with a plan to be mortgage-free.
Skippy1134  
#51 Posted : Friday, June 7, 2013 5:05:12 AM(UTC)

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Semi-Retired wrote:
The proposed standard deduction for a couple will be raised to $12,000.

This is good news for retirees (like Skippy) with a plan to be mortgage-free.


We won't be quite mortgage free, at least for awhile. Missed that goal by a bit. But we'll refinance the remainder of the mortgage and try to pay it off within a year or two. We held out some proceeds to do some work on the NC house and pay off a credit card and some house-selling related bills. Still not too bad in the scheme of things.
Jim Hanrahan  
#52 Posted : Friday, June 7, 2013 8:55:05 PM(UTC)
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Semi-Retired wrote:
The proposed standard deduction for a couple will be raised to $12,000.

This is good news for retirees (like Skippy) with a plan to be mortgage-free.
To be clear, the total change is not much, but helps.
The current system:
Married: Allows $2,500/person plus the $6,000 standard deduction. Total: $11,000 (Man and wife, no kids)
Single: _Allows $2,500/person plus the $3,000 standard deduction. Total: $5,500

Note: the per person allowance is reduced to $2,000/person if the total taxable income is over $100,000(married)/$60,000(single).

H998 proposed system eliminates the per person allowance and increases the standard deduction:
Married: $12,000
Single: _$ 6,000
Jim Hanrahan  
#53 Posted : Friday, June 7, 2013 9:38:23 PM(UTC)
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As I searched the NC legislation web site,
Link to NC Leg bill search web site
I found this bill on retirement plans, and it seems to expand the exemption on govt plans (pension, TSP, etc) by phasing-in qualified vesting dates:

SECTION 2. G.S. 105-134.6(b) is amended by adding a new subdivision to read:
"(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may
deduct any of the following items to the extent those items are included in the taxpayer's
adjusted gross income.
..
(5c) The amount received during the taxable year from one or more State, local,
or federal government retirement plans, subject to the phase-in provided in
this subdivision:

Taxpayer Vested in the Plan on or before:
Income Years Beginning
August 1992 In 2013
August 1995 In 2014
August 1998 In 2015
August 2001 In 2016
August 2004 In 2017
August 2007 In 2018
August 2010 In 2019
August 2013 In 2020
August 2016 In 2021
Skippy1134  
#54 Posted : Friday, June 7, 2013 10:33:10 PM(UTC)

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EngineerJim wrote:
I found this bill on retirement plans, and it seems to expand the exemption on govt plans (pension, TSP, etc) by phasing-in qualified vesting dates:


Wow, while a state like Maryland is driving retirees out at least one legislator in NC sees the benefits of attracting retirees.
TotallyRetired  
#55 Posted : Saturday, June 8, 2013 1:05:48 AM(UTC)

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Isn't the standard deduction for Maryland much less than $11,000 or $12,000?

I'm thinking that a mortgage-free couple who relocated to NC would benefit by

--being able to offset any non-retirement income against a high standard deduction

&

--saving at least $1,000 per month in mortgage interest while living in a house that is as nice (but maybe smaller) than the one they left in MD.
Skippy1134  
#56 Posted : Saturday, June 8, 2013 1:53:54 AM(UTC)

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I don't know what the mortgage deduction is in MD, but everything else is so high it doesn't make much difference. I think the Governor recently eliminated mortgage interest deductions for couples making over $150,000 per year (high wage earners in his opinion).
Jim Hanrahan  
#57 Posted : Saturday, June 8, 2013 2:09:52 AM(UTC)
EngineerJim

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Semi-Retired wrote:
Isn't the standard deduction for Maryland much less than $11,000 or $12,000?
Remember you have to compare the total of the personal exemptions plus the standard deduction to the proposed NC $12,000 (married) deduction.

For 2012, Maryland allowed $3,200/person ($6,400 for married filing jointly) plus the standard deduction which is complicated, but use $4,000 for comparison. MD $10,400, NC $12,000

The STANDARD DEDUCTION METHOD gives you a standard deduction of
15% of Maryland adjusted gross income (line 16)
with minimums of $1,500 and $3,000 and maximums of $2,000 and $4,000, depending on your filing status. If your income is over $26,667 then it is limited to $4,000.

But remember, MD taxes federal retirement pensions etc. and NC doesn't (if qualified/vested per Bailey Decision). And property taxes are high to go along with high housing costs...

Mortgage interest is allowed if you itemize deductions in Maryland.
EDIT: But as posted above, it was proposed to be reduced at certain income levels. But it didn't pass in Nov 2012. Will they try again? Will the federal govt try to eliminate the mortgage interest deduction???
Link to article on MD proposal
The proposal would reduce the amount of itemized deductions by 10 percent for individuals and couples earning more than $100,000 in gross income. For individuals and families earning more than $200,000, homeowners would see a 20 percent reduction in their itemized deductions.EngineerJim2013-06-08 10:35:03
Skippy1134  
#58 Posted : Saturday, June 8, 2013 3:36:06 AM(UTC)

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Maryland raised the tax rate on couples making over $150k from 4.75% to 5.0% last year. However retirement income would likely still be at 4.75%

Also normally not recognized in the various tax comparisons are the county taxes assessed in Maryland. In my county that is another 3.2% on top of state taxes. NC doesn't have county income taxes, they derive their taxes through sales tax.

So ignoring deductions, leaving Maryland for NC would lower my income tax from rate about 7.95% to zero. Plus lower property taxes, insurance rates, etc.
TotallyRetired  
#59 Posted : Saturday, June 8, 2013 5:05:28 AM(UTC)

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So it looks like the only negative of leaving Maryland would be if a retiree decided to unretire.
Semi-Retired2013-06-08 18:52:33
Skippy1134  
#60 Posted : Saturday, June 8, 2013 11:02:54 AM(UTC)

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Semi-Retired wrote:
So it looks like the only negative of leaving Maryland would be if a retiree decided to unretire.


Or retire. The negative is staying in Maryland unless there is a major reason to do so, like family, grandchildren, etc. Other than that I can't find a reason, and I'm at least 6th generation in Maryland.
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