You might be wondering if you have to pay taxes on your Social Security income if you live in New Mexico. The solution is more complicated than you may imagine. Social Security benefits may be subject to state taxes in New Mexico even though they are not taxable at the federal level.
Social Security benefits are not taxable in New Mexico unless your income is above a specific amount. The barrier is $25,000 for solo taxpayers and $32,000 for married couples filing jointly. A part of your Social Security benefits can be subject to state income tax if your income is higher than these thresholds.
It’s also vital to keep in mind that New Mexico does not impose taxes on Social Security benefits received by low-income individuals. You can be qualified for a full or partial exemption from state taxes on your Social Security benefits if your income is below a particular threshold.
In addition to income taxes, New Mexico levies a 7% sales tax. Simply multiply the purchase price by 0.07 to include this tax in the final total. For instance, the sales tax would add $7 to a $100 purchase, bringing the final price to $107.
A homestead exemption is also available in New Mexico to qualified homeowners. This exemption is an effective technique for lowering your property tax burden because it enables you to deduct up to $2,000 from the taxable value of your principal dwelling.
Consider moving to Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming if you’re seeking for a state without income taxes. These states are favored by retirees and anyone who want to reduce their tax burden because they don’t have a state income tax.
Once they turn 65, seniors in New Mexico can potentially be qualified for a property tax freeze. Even if the value of your home rises, this freeze stops your property tax bill from rising. You must fulfill specific income and residency conditions in order to be eligible for the freeze.
In conclusion, New Mexico state taxes on Social Security benefits may apply, but only if your income reaches specific criteria. In addition, the state maintains a homestead exemption, a 7% sales tax, and a property tax freeze for seniors. It’s critical to comprehend these regulations and utilize any exemptions or deductions you may be qualified for if you want to reduce your tax liability.