SPECIAL REPORT: Tax Considerations for Veterans and Retirees

How Does Being a Veteran Affect Your Taxes? | 10 Most Tax-Friendly States for Retirees | Five Things to Know About Taxes on Social Security Created for {EMAIL} | [Web Version]( November 10, 2023 CONNECT WITH KIPLINGER  [LinkedIn]( [Facebook]( [X]( [Youtube]( [Instagram]( Kiplinger Today [SIGN UP]( ⋅ [SHARE]( [] Top Story [] [How Does Being a Veteran Affect Your Taxes?]( [How Does Being a Veteran Affect Your Taxes?]( (Getty Images) Some Veterans are unsure about how their military service affects their taxes. The fact is that military retirement pay is taxable at the federal level, while disability compensation benefits and disability retirement pay are generally exempt. Moreover, retired military service members may be eligible for tax benefits offered by the federal government and some states. [Here are a few examples](. [] State Taxes [] [10 Most Tax-Friendly States for Retirees]( [10 Most Tax-Friendly States for Retirees]( (Getty Images) Choosing which state to retire to involves weighing many pros and cons. It also means taxes will likely cross your mind. Knowing which are the most tax-friendly states for retirees may help. Just keep in mind that no state has zero taxes. So, in states where some taxes are low, other taxes and fees may be high. This is [our top ten ranking of states]( with the lowest retiree tax burdens. [The World Has Changed. Has Your Investment Strategy?]( At Vanguard, we're invested in you. Which is precisely why we've created Vanguard Personal Advisor ®, providing remote access to financial advisors, real-time goal tracking, and more confidence you'll meet your goals. [There's never been a more perfect time to get started]( Paid non-client promotion [GET STARTED]( ADVERTISEMENT [] Social Security Taxes [] [Five Things to Know About Taxes on Social Security]( [Five Things to Know About Taxes on Social Security]( (Getty Images) One common misperception is that Social Security benefits are entirely tax-free. However, it’s been the rule for many years that some portion — in some cases, up to 85% — of your Social Security benefits can be taxable, depending on your income. So, it is crucial to understand how taxes on your benefits work and how they can affect your financial situation. To get you started, [here are five things]( to know about the ins and outs of Social Security taxes. [] Military Retirement [] [Most Expensive States for Retired Military Service Members]( [Most Expensive States for Retired Military Service Members]( (Getty Images) Most states fully exempt military retirement income from state taxation. The bad news, when it comes to tax treatment, is that some states don’t favor retired military members. Other states only offer partial tax breaks to retired military service members. But [veterans can keep more of their military pension pay by avoiding these high-taxed, most expensive states](. [] Tax Deductions [] [The Extra Standard Deduction for People Over Age 65]( The tax code offers a perk in the form of an extra standard deduction for people aged 65 or older. For eligible older adult filers, the additional deduction stacks on the regular standard deduction and can further reduce taxable income. That, in turn, can increase the amount of hard-earned money you keep in retirement. Here’s what you need to know about this tax break. [Read More]( [Advice From Vanguard That Puts You Back in Control]( At Vanguard, we're invested in you. Which is precisely why we've created Vanguard Personal Advisor®, providing remote access to financial advisors, real-time goal tracking, and more confidence you'll meet your goals. [There's never been a more perfect time to get started]( Paid non-client promotion [GET STARTED]( ADVERTISEMENT [] Taxes in Retirement [] [How All 50 States Tax Retirement Income]( State and local tax burdens vary from one place to another. So if you’re considering moving, we’ve pulled together this guide so you know how every U.S. state and the District of Columbia taxes retirement income. You’ll have an overview of taxes on employment, investments, pensions, retirement distributions, and Social Security. [Read More]( ABOUT KIPLINGER When we write about money, we get it right. So the decisions you make with your dollars are also right. Kiplinger is a trusted provider of unbiased financial advice, objective business and economic forecasts, and practical help to millions of business professionals, investors, and individuals seeking to make more profitable decisions with their money. Our [flagship publications]( include [Kiplinger Personal Finance]( magazine, [The Kiplinger Letter]( [The Kiplinger Tax Letter]( [Kiplinger Retirement Report]( and [Kiplinger Investing for Income.]( All are regarded as the leading publications in their respective fields. Every day, millions of readers rely on our [free e-newsletters]( for help on everything from getting the best rate on a mortgage or car loan, to managing their businesses in an uncertain world, avoiding an IRS audit, building wealth for a secure retirement, or investing wisely in any kind of market. Now it’s your turn to reap all the rewards Kiplinger has to offer. Visit [Kiplinger.com](, your gateway to all of the above and much more. Check in any time for our latest advice on how to make more money, and keep more of the money you make. Stay right on the money, with Kiplinger. [Kiplinger]( [Sign Up]( | [Print Publications]( | [Unsubscribe]( [Privacy Policy]( | [Cookies Policy]( | [Terms and Conditions]( CONTACT US: [FEEDBACK](mailto:kiplingertoday@smartbrief.com) | [ADVERTISE]( [Future]( Future US LLC © Full 7th Floor, 130 West 42nd Street, New York, NY, 10036