Anyone here have indepth knowledge of tax ramifications for living in PA versus DE?

[Delco Lion]

I am 58, retired, empty nester, engaged and looking at moving to a smaller house and an area with lower taxes. I could live in Delco or Chesco, or move to Northern DE. I'm curious about tax ramifications on SSI, earned income, inheritance, estate, capital gains, etc. I know DE has no sales tax, low property taxes, and average public schools, but thats about it. Is there an advantage to moving to DE?

 

[Player2BNamedL8r]

All due respect to SEPA and NDE, but if you're retired, why limit yourself to those locales? Why not shake things up and move to warmer climates? Or put another way, why put up with one more lousy winter if you are no longer tied to your current location?

 

[Delco Lion]

All due respect to SEPA and NDE, but if you're retired, why limit yourself to those locales? Why not shake things up and move to warmer climates? Or put another way, why put up with one more lousy winter if you are no longer tied to your current location?

My fiance is younger than me and works for CHOP in Philly. She is not in a position to retire and we are not ready to move South.

 

[Shendojoe]

Live in Pa. for 64+ years. Moved to Bethany Beach area in August in a planned community (not 55+). Very happy. Winters are considerably milder than the Lebanon area. One snow fall of about 13 inches and it was all gone in 4 days. My wife walks the dog often on the beach in winter.

Car registration to Delaware tags has a significant fee.
Fees on a home purchase are higher than Pa.
No sales Tax.
Extremely low real estate taxes.
Retirement funds are taxed.

The money we save on RE taxes alone for a comparable home is about $6000/year.

Figure about a 4 year stay and your in the money every year after.

 

[heckmans]

I am 58, retired, empty nester, engaged and looking at moving to a smaller house and an area with lower taxes. I could live in Delco or Chesco, or move to Northern DE. I'm curious about tax ramifications on SSI, earned income, inheritance, estate, capital gains, etc. I know DE has no sales tax, low property taxes, and average public schools, but thats about it. Is there an advantage to moving to DE?

I cannot answer your question in it's entirety, but when I bought a house in Delaware, I was surprised leading up to closing when I found out about the 3% real estate transfer tax. Half is paid by buyer and half by seller. Just take it into account on whatever calculations you make. Good Luck!

link from a quick google search
http://www.pikecreekloans.com/how-delaware-transfer-tax-works

 

[psualt]

I am 58, retired, empty nester, engaged and looking at moving to a smaller house and an area with lower taxes. I could live in Delco or Chesco, or move to Northern DE. I'm curious about tax ramifications on SSI, earned income, inheritance, estate, capital gains, etc. I know DE has no sales tax, low property taxes, and average public schools, but thats about it. Is there an advantage to moving to DE?

Your social security is exempt from taxation in both states. Income from IRAs and pensions are not subject to tax in PA.

 

[psualt]

I should also point out that in PA you are paying the flat rate of 3.07% on all taxable income. It appears the DE brackets increase quickly from a low rate of 2.2% up to 6.6% on income over $60,000. Depending on your wife's earned income, this can be significant when factoring in retirement income, etc.

 

[PSU_Nut]

See a tax accountant and don't rely on a message board. Have them run both scenarios and go from there.

 

[novaclassof90]

Calling DE public schools avg is being kind for some districts. I believe DE is only state that has more k-12 children in private/charter schools than it does in traditional public schools. NC County districts like Red Clay and Christina are not great, especially at high school level. Great tax state though, no sales tax really makes a difference and property taxes are very low comparred to PA and NJ.

 

[Big 0]

I moved from PA to DE several years ago and at the time tax wise it was much cheaper in DE. Real estate taxes went from about $2800 per year to $893 per year. Made up for the difference in income tax. Then there was the lack of sales tax.

The drawbacks living in DE included the large influx of NY and NJ retirees so they could flee from the incredibly high taxes they voted for in their old state of residence thereby raising the cost of living in DE. My neighbor in FL was born and lived his entire life in DE but retired in FL because he didn't want to deal with the NY/NJ people and the rising cost of living they brought.

Also not a whole lot to do in DE the winter. The public school system leaves a lot to be desired as well.

 

[RochLion]

I moved from PA to DE several years ago and at the time tax wise it was much cheaper in DE. Real estate taxes went from about $2800 per year to $893 per year. Made up for the difference in income tax. Then there was the lack of sales tax.

The drawbacks living in DE included the large influx of NY and NJ retirees so they could flee from the incredibly high taxes they voted for in their old state of residence thereby raising the cost of living in DE. My neighbor in FL was born and lived his entire life in DE but retired in FL because he didn't want to deal with the NY/NJ people and the rising cost of living they brought.

Also not a whole lot to do in DE the winter. The public school system leaves a lot to be desired as well.

Those people are doing the same thing to many of the rural communities in Eastern PA. My sister lives in a gated community in the Poconos and she say the dues have skyrocketed over the last few year with New Yorkers coming in and demanding all sorts of amenities.

 

[Delco Lion]

Thanks for the insight. The big thing I do see are the cheaper real estate taxes but the the 3.07% versus 6.6% taxable income rate kind of makes that a wash. For those truly retired, DE does look better.

 

[BobPSU92]

DE means Germany, right?