If you want to hang onto more of your hard-earned money, you should consider living in a state with low taxes. In fact, you might be surprised at how much money you can save depending on where you live.
To find out how much the total tax burden varies across the U.S., GOBankingRates examined the average amount residents in all 50 states and the District of Columbia pay in income, property, sales and gas taxes. The median household income in the U.S. is $56,516, based on 2015 Census Bureau figures. GOBankingRates found that average total taxes paid is $14,998.83, which means about 26 percent of American taxpayers' income typically goes toward taxes.
Depending on where you live, you could pay a lot more — or less — in taxes.
Click through to see where you could pay less in taxes:
Best and worst states for retirement
Best and worst states for retirement
You knew it had to be high on the list, didn't you? In terms of affordability, Florida topped the list while it placed fifth in terms of quality of life, overcoming its 20th-ranked healthcare rating.
Ranked second in healthcare while quality of life came in 8th place, Colorado is constrained by its 23rd-place ranking in affordability.
3. South Dakota
The home of Mount Rushmore is the second most affordable state and ranked sixth when it came to healthcare, but can't break the top half in quality of life (ranked 32nd).
Not typically thought of as a retirement destination, Iowa has decent rankings across the board (9th in healthcare, 11th in quality of life and 26th in affordability).
Quality of life ranks well in Virginia (9th) while affordability and healthcare rankings are above average (18th and 21st respectively).
The next five desirable retirement states are, in order:
Dead last in quality of life and 45th in healthcare, Arkansas is pulled up by its 20th-place showing in affordability.
The same principle applies to Mississippi, but even more so. The state is 49th in quality of life and last in healthcare, but it ranks 10th in affordability.
48. Rhode Island
Healthcare is above average (22nd), but quality of life and affordability are poor at 46th and 48th place, respectively.
49. New Jersey
The least affordable state in the union also has below average rankings in quality of life (28th) and healthcare (33rd).
Kentucky ranks 47th in both quality of life and healthcare and only 38th in affordability, earning the Bluegrass State WalletHub's least desirable retirement state ranking for 2018.
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Methodology: To generate the tax bill in every state, GOBankingRates surveyed four key taxes: income taxes, property taxes, sales taxes and gas taxes. Income tax bills include both state and federal taxes and are based on 2015 Census Bureau median household income figures. Property taxes were calculated using each state's rate and Zillow's median home value index. Gas taxes are based on each state's rate and an average annual consumption of 656 gallons. Sales taxes were calculated using each state's tax rate and Americans' average daily spending of $84.
You can find almost anything for sale on eBay, from a piece of fine art to clippings of Justin Bieber’s hair. So it's no surprise that the IRS doesn't view all sellers alike in the online marketplace. You may not have to pay tax at all if you are essentially hosting an online garage sale, but if you run your eBay account more like a business, you should be reporting your sales to the IRS.
Originally created to make sure the wealthy paid taxes even after using tax breaks and loopholes, the Alternative Minimum Tax (AMT) has never been updated and continues to impact middle class Americans more and more each year as a result of inflation. To compensate for inflation, the AMT now includes an exemption amount. This exemption is indexed for inflation so it changes every year.
Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together. In the vast majority of cases, it's best for married couples to file jointly, but there may be a few instances when it's better to submit separate returns.