![]() In many parts of the state, annual property taxes for homeowners equal less than $1,557. New Mexico’s average effective property tax rate is 0.73%, which is fairly low. How high are property taxes in New Mexico? Seniors age 65 or older can also claim a refundable medical care credit if they have uncompensated medical care expenses of more than $28,000. These range from 1.7% to 5.9%, as shown in the table above. Income in excess of the deduction, which is $8,000 for seniors, is taxed at New Mexico’s income tax rates. As with Social Security, these forms of retirement income are deductible. ![]() Retirement income from a pension or retirement account, such as an IRA or a 401(k), is taxable in New Mexico. If retirement income exceeds the deduction amount, the excess is considered taxable income and taxed at the rates shown in the table below.Īre other forms of retirement income taxable in New Mexico? The exemption can be applied to all retirement income including Social Security benefits, pension income and retirement account income. For non-seniors, the income limits are slightly higher at $36,667 for single filers and $55,000 for married filers. For seniors, the income limits to be eligible for the exemption are $28,500 (of AGI) for single filers or $51,000 for married filers. For persons age 65 and older, the deduction is $8,000. The exemption is $2,500 for taxpayers under the age of 65. Social Security retirement benefits are taxable in New Mexico, but they are also partially deductible. Is Social Security taxable in New Mexico? Sales taxes are 7.72% on average, but exemptions for food and prescription drugs should help seniors lower their overall sales tax bill. New Mexico has some of the lowest property taxes in the U.S., with an average effective rate of 0.73%. ![]() For seniors age 65 or older, there is an $8,000 deduction on retirement income if the household adjusted gross income (AGI) is less than $28,500 for single filers, $51,000 for married people filing jointly and $25,500 for married taxpayers filing separately. New Mexico is moderately tax-friendly for retirees. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. New Mexico’s sales taxes are also above average, but its property taxes are among the lowest in the U.S.Ī financial advisor can help you plan for retirement and other financial goals. The state taxes all forms of retirement income, including Social Security, while offering a deduction to seniors with household income below a certain limit. On the other hand, retirement taxes in New Mexico may be relatively high for many retirees. It also has nearly 400,000 acres of national park land and more than 10 million acres of national forest land. The cost of living in New Mexico is relatively low, with a median home value of less than $214,000. It has an arid climate with more than 250 days of sunshine per year. There are a lot of great reasons to retire in the Land of Enchantment. New Mexico Retirement Taxes Photo credit: ©/omersukrugoksu ![]()
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