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F E B R U A R Y 2 0 1 2 / F O R E I G N S E R V I C E J O U R N A L
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than one federal pension, the exclusion
applies to each pension or annuity sepa-
rately. Social Security is not taxed.
RHODE ISLAND:
U.S. government
pensions and annuities are fully taxable.
Sales tax is 7 percent.
SOUTH CAROLINA:
Individuals
under age 65 can claim a $3,000 deduc-
tion on qualified retirement income;
those 65 years of age or over can claim a
$10,000 deduction on qualified retire-
ment income. A resident of South Car-
olina who is 65 years or older may claim
a $15,000 deduction against any type of
income ($30,000 if both spouses are over
65), but must reduce this figure by any
retirement deduction claimed. Social
Security is not taxed. Sales tax is 6 per-
cent plus 1 percent in some counties.
Seniors 85 and over pay 5 percent.
SOUTH DAKOTA:
No personal in-
come tax or inheritance tax. State sales
and use tax is 4 percent; municipalities
may add up to an additional 2 percent.
TENNESSEE:
Social Security, pen-
sion income and income from IRAs and
TSPs are not subject to personal income
tax. Most interest and dividend income
is taxed at 6 percent if over $1,250 (sin-
gle filers) or $2,500 (married filing
jointly). However, those over 65 with
total income fromall sources of less than
$16,200 for a single filer and $27,000 for
joint filers are completely exempt from
all taxes. State sales tax is 7 percent with
between 1.5 and 2.75 percent added, de-
pending on jurisdiction.
TEXAS:
No personal income tax or
inheritance tax. State sales tax is 6.25
percent. Local options can raise the rate
to 8.25 percent.
UTAH:
In 2008, Utah instituted a flat
tax rate of 5 percent of all income. The
previous retirement income exclusion
has been replaced for taxpayers over 65
by a retirement tax credit of $450 for
single filers and $900 for joint filers.
This is reduced by 2.5 percent of income
exceeding $25,000 for single filers and
$32,000 for joint filers. See the stateWeb
site for details. State sales tax is 4.7 per-
cent; local option taxes may raise the
total to as much as 7.95 percent.
VERMONT:
U.S. government pen-
sions and annuities are fully taxable.
State general sales tax is 6 percent; local
option taxes may raise the total to 7 per-
cent (higher on some commodities).
VIRGINIA:
Individuals over age 65
can take a $12,000 deduction. The
$12,000 deduction is reduced by one
dollar for each dollar by whichAdjusted
Gross Income exceeds $50,000 for sin-
gle, and $75,000 for married, taxpayers.
All taxpayers over 65 receive an addi-
tional personal exemption of $800. So-
cial Security income is exempt. The
estate tax was repealed for all deaths
after July 1, 2007. The general sales tax
rate is 5 percent (4 percent state tax and
1 percent local tax).
WASHINGTON:
No personal income
tax. State sales tax is 6.5 percent; rates
are updated quarterly. Local taxes may
increase the total to 9.5 percent.
WEST VIRGINIA:
$2,000 of any civil
or state pension is exempt. Social Secu-
rity income is taxable only to the extent
that the income is includable in Federal
Adjusted Gross Income. Taxpayers 65
and older or surviving spouses of any
age may exclude the first $8,000 (indi-
vidual filers) or $16,000 (married filing
jointly) of any retirement income. Out-
of-state government pensions qualify
for the $8,000 exemption. State sales tax
is 6 percent.
WISCONSIN:
Pensions and annuities
are fully taxable. Those age 65 or over
may take two personal deductions total-
ing $950. Benefits received from a fed-
eral retirement system account
established before Dec. 31, 1963, are not
taxable. Since TaxYear 2008,Wisconsin
has not taxed Social Security benefits in-
cluded in Federal Adjusted Gross In-
come. For tax years after 2009, those
over 65 and with a FAGI of less than
$15,000 (single filers) or $30,000 (joint
filers) may take a $5,000 deduction on
income from federal retirement systems
or IRAs. State sales tax is 5 percent.
Most counties charge an extra 0.5 per-
cent.
WYOMING:
No personal income tax.
State sales tax is 4 percent. Local taxes
may increase the total to 6 percent.
Energy credit:
In 2011, the maximumnon-business energy property credit is $500
minus amounts taken in 2006 through 2010. There are also other, lesser energy credits.
For more on these and other provisions, go to
www.irs.gov.
Capital gains and losses:
Schedule D will look different for 2011. A new Form
8459 will be used to list all of the short-termand long-termcapital gains and losses. The
totals on Form 8459 flow to page 1 of Schedule D.
New for 2011
The AFSA Tax Guide is also available online at
www.afsa.org/afsa_tax_guide.aspx