Arizona is a delightful place to spend your well-earned retirement. The sun-kissed vistas, the seemingly endless golfing and shopping, and the nearly 300 days of sun annually make it a wise place to retire. If you’re considering The Grand Canyon State, Arizona taxes for retirees are one of the many factors you should consider. 

Which Income is Subject to Arizona Taxes?

Arizona does not force its residents to pay state income taxes on Social Security income. However, if your income derives from investments or employment, it is a different story.

Any income earned from your 401(k), wages, or 403(b) will be subject to Arizona’s state income taxes. Arizona calculates tax liability on a gradual scale. It means your income tax is not a fixed rate regardless of what you earn.

What are the Tax Rates?

Tax rates vary based on your income and marital status. If you’re single and earn less than $27,272, your tax rate is 2.59%. Meanwhile, if you’re single and earn between $27,273 and $54,544, your tax rate is 3.34% minus the $205 deduction. The highest tax rate you’ll pay is 4.50%. It only applies if your income exceeds $163,633.

Meanwhile, married households receive a more flexible tax bracket to account for multiple incomes. If you and your spouse earn less than $54,544, your Arizona tax rate is 2.59%. If it’s between $54,545 and $109.088, you’ll pay a 3.34% rate minus $409. To qualify for the highest rate of 4.50%, your household income combined must exceed $327,264.

Arizona does offer standard deductions to offset some of this tax liability. Single filers can receive a deduction of $12,550. Married households earn up to $25,100. You’ll also receive a $100 exemption for every qualifying dependent. 

Do Partial-Year Residents File Arizona Taxes?

It depends on you how much you make. If you’re single or filing as head of household, you must earn more than $12,400 to be liable for Arizona taxes. Married filers must make more than $24,800 to be eligible. 

Enjoy Your Retirement, We’ll Handle Your Taxes

Trust us to handle your taxes. Every year, our tax experts take additional training to ensure we are up to date with all the changes in tax law. Our team is adept at filing returns while ensuring you remain compliant with federal and state taxes. Let us take Arizona taxes off your to-do list, so you can get back to enjoying more of your retirement. Learn how we help by contacting us.