I Asked ChatGPT How Much You Would Save If You Moved to a Zero-Tax State — Here’s the Math

Core Insights - Moving to a zero-income-tax state can seem beneficial, but actual savings depend on various factors including the state of origin, income level, and other taxes incurred [2][3][4]. Group 1: Financial Implications - The potential savings from moving to a zero-income-tax state are illustrated through examples, showing that the real financial impact varies based on individual circumstances [3][5]. - For an income of $60,000, moving from Illinois to Tennessee results in estimated annual savings of $2,970, equating to approximately $248 per month, which can significantly aid in covering expenses like car payments or childcare [7][9]. - For a higher income of $150,000, moving from New York to Florida involves a more complex calculation due to New York's graduated tax system, but the potential savings can be substantial [10]. Group 2: Tax Structure Overview - States like Texas, Florida, and Tennessee do not impose state income taxes on wages, but residents still face federal taxes and other local taxes [4]. - There are a total of nine states that do not levy state income tax on earned income, which can influence decisions for individuals considering relocation [4]. Group 3: Assumptions and Methodology - The analysis uses simplified assumptions to provide a realistic estimate of state income tax savings when moving, avoiding complexities of individual tax returns [5]. - The examples provided focus solely on state income tax to maintain clarity in comparisons [3].