Your Social Security benefits will probably serve as an important source of income once you retire. And one way to stretch those benefits is to limit the amount of taxes you pay on them.
Depending on your income, you may be subject to federal taxes on your benefits. But the state you retire in will dictate whether you're taxed on your benefits at the state level.
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Who does -- and doesn't -- tax Social Security?
First, the good news. There are 37 states that do not currently impose a tax on Social Security benefits:
- New Hampshire
- New Jersey
- New York
- North Carolina
- South Carolina
- South Dakota
If you retire in one of these states, you won't lose a chunk of your benefits to extra taxes, so you may want to consider that when deciding where to settle down for your senior years.