Don't understand Idaho's high taxes (Pocatello, Idaho Falls: 2015, apartment, rentals)

[Native Idahoan]

I have to say that when I lived in Idaho, taxes were not something that was uppermost in my mind. I had heard something about pensions being taxed and obviously, we plan to pin this down before we retire. Hubby will have a union pension as well as a 401(k) that he is presently contributing to. I have an SEP through my employer and I know absolutely zip as to how all of this is affected. Information would be appreciated.

[Cnynrat]

Consult your tax advisor to confirm, but I believe pensions, 401k withdrawals, and SEPs will be taxed. There is a break for retirees in that social security benefits are not taxed. There is also a program that allows you to defer and/or reduce property taxes if you meet certain income requirements.

If you have property you should also look into the property tax benefits from filing a forest management plan. I think you need at least 5 acres, but I'm not completely sure about that. That will give you a pretty good reduction in property taxes.

Dave

[gbioryl]

Originally Posted by KurtAngleDoesn'tSuck

Exactly. You don't understand.
Most families receive a $100 per person grocery tax credit per year.
Idaho grocery credit - Idaho State Tax Commission
The tax on a single person's income of $10,718 is less than 3%.
Anything they make over and above that is taxed at 7.4%
Individual Income tax rate schedule - Idaho State Tax Commission

1) Actually I do understand the grocery credit. Getting $100 back would pretty much cause me to break even. So then what is the point of charging it in the first place if the state doesn't get to keep it in the end? You would think the state would save money by not having to pay someone to do the job of collecting it and then returning it.

2) Also pretty sure most people make way more than $10,718. Again 7.4% if you make $10 grand. Doesn't make sense.

Originally Posted by AK76

So, what are you saying?
Paying zero income tax while paying some sales and property tax is a more beneficial scenario to me, versus paying income, sales and property tax. Sales and property tax can be mitigated to a degree by lifestyle and habits, as well as opportunity to shop across state lines where the adjacent state has zero, or less sales tax.

Driving 30 mins is not saving me any money. You just spent how much in gas to save how much in sales tax? You also make my point. Sales and property tax, the two I can control are way cheaper in Idaho.

Originally Posted by pnwmdk

What makes you think Washington has low taxes? It does not. In fact, Washington's sales tax can be as high as 9.6% on sales, and then it has a gross receipts tax of up to 1.8 percent - for a sizable business, that could be 20 to 50% of your profit margin. That's a tax you pay even if you lose money - and the highest rate of tax is on ... Services.

Then Washington has a USE tax, a personal property tax, and a real estate tax. And there's more, as well.

Never WA was cheaper. I said the tax burden is almost the same.

[coginthewheel]

Hi there, Im new to this site and I see the tax burden and concerns in Id. What does the state require for a farm to enable it to have lower taxes?

[banjomike]

There are too many variables to answer your question here, I think.
Much depends on the size of the farm, the intended crops, and other stuff.
In general, the greater the amount a person plans on investing in a business here, including farming and related industries, the greater the incentives are.

if you are looking to start a hobby farm or a small farm, there won't be nearly as much, for example, than if you are planning to re-locate a large dairy here, or buy a current farm with plans for expansion. Idaho is actively recruiting larger potential employers statewide.

Almost all of the major agriculture is in the south and central areas of the state. While we're most known for our potatoes, Idaho grows a lot of onions, sugar beets, and related crops, too. Idaho is also a major grain producer, especially in malting barely, wheat, and split peas, canola seed, and high quality alfalfa. Central Idaho grows a lot of seed corn, hops, orchards and organic crops. There's a lot of cattle production and other livestock as well, along with a lot of industries related to all the various crops. Grapes are grown in a few spots, and Idaho has some wineries and distilleries that use Idaho crops.
The southwest corner is a big dairy producer, especially in cheese and whey, and lately, in producing yogurt. Chobani just built a new Greek yogurt factory in Twin Falls.

I think the first place for you to look around is:

Home - Idaho.gov

Idaho Commerce - Incentives

http://commerce.idaho.gov/site-selec...ood-production

Good luck!

[ScottStielow]

Originally Posted by f5fstop

And license plate fees in WY are approx. 10 times that in ID. And for me, property values in the only three cities I liked, Cody, Jackson and Lander were way too high for my taste.

Very true. Car registration, insurance is all cheaper in Idaho than Wyoming.
So Idaho remains in my retirement destinations. Even if i have to give up some retirement to Idaho State taxes.
Good discussion on this subject.

[hatin11r]

Hudge....sent you a pvt. message.

[bythecreekIA]

Based on Iowa taxes, the only tax that is higher in Idaho is the sales tax on groceries. The property taxes alone look to be 1/2 what we currently pay here.

[zed42]

FYI on military retirement pay it appears that the law has changed. It looks like one has to be 10% disabled to deduct the retirement pay vs last year if you were over 65 you could deduct it. At lest that is the way I am reading the instruction for Form 39R

[gbioryl]

So after doing some research and math I discovered what my real income tax rate would be. I will be making $38400.00. Now the top bracket stops at $21,436.00 for married couples. The max tax on that is $1,093.18, which is 5.1% of $21,436.00. The difference that would be taxed at 7.4% is $16,964.00, which would be $1,255.33 in additional income tax for a grand total of $2,328.53 paid as income tax at a 6.0% total income tax rate. Yes I think I did that right.

$1,093.18 is 5.1% of $21,436.00.

$1,225.33 is 7.4% of $16,964.00.

$1,093.18 plus $1,225.33 equals $2,328.53.

$21,436.00 plus $16,964.00 equals $38,400.00.

$2,328.53 divided by $38,400.00 is 6.0%.

Still high for a conservative state, but at rate I can live with. Between that rate, a sales tax of 6.0% and a property tax of .61% for a total of 12.61% of my income in taxes. The higher overall tax in Washington is 11.04% and that is without an income tax. It is a difference that I can live with for the freedoms Idaho will give me.