Federal Retirees

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.

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.

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

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

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

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.

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

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.

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

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