When it is worth real money
Large IRA or 401(k) withdrawals year after year are where Tennessee's zero income tax adds up fastest.
The state-line question
Should We Move to the Tennessee Side When We Retire?
If you live in Bristol, Virginia, or up the road in Abingdon, somebody has probably told you the answer already: move to Tennessee, there's no income tax. Sometimes that's right, and it's worth real money. Sometimes it barely matters. It depends on your income, your house, and your life, and it's worth running your actual numbers before you believe either version.
Fit
Who this page is for
Bristol, Virginia and Southwest Virginia households close to retirement who want a real answer to the move question, not a slogan.
Best-fit situations
- You live on the Virginia side and retirement is within sight.
- Most of your savings is in IRAs, 401(k)s, or a pension.
- You want the whole comparison: income, property, vehicle, and sales taxes.
- Roots matter to you as much as the tax bill.
Talley Wealth is twenty minutes away in Johnson City, and David grew up in Bristol. We run this comparison with real numbers, both directions.
The decision
What actually changes when you cross the line.
Virginia doesn't tax Social Security. It does tax IRA and 401(k) withdrawals and most pension income, and the top rate of 5.75% starts at just $17,000 of taxable income. There's an age deduction of up to $12,000 at 65, but it shrinks once income passes $50,000 single or $75,000 married, so many families who saved well get little or none of it. Tennessee taxes none of it. No state income tax at all.
Now the other side of the ledger, because there is one. Tennessee's sales tax runs close to 9.75% around here and applies to groceries. Virginia charges an annual personal property tax on your vehicles; Tennessee mostly doesn't. And property taxes are closer than people think: Washington County, Virginia has some of the lowest rates in the area and can come in below Bristol, Tennessee. Whether the move wins, and by how much, comes down to your income mix.
Why we can talk about this straight
David was born and raised in Bristol. This question isn't theoretical to us; it's neighbors and family deciding whether a move across town is worth it. The answer should come from your numbers, not from a slogan.
Read public reviewsWhen it barely matters
If your income is mostly Social Security, Virginia was not taxing it anyway, and the higher sales tax takes back some of what the move saves.
When you should stay put
If the math saves a few hundred dollars and the cost is your neighbors, your church, and the house you raised your kids in, that's not a win. We'll say so.
Decision depth
The move has to be real, and the math has to be yours.
Three things we check before anyone calls a moving company.
01
Your income mix
Social Security is not taxed by Virginia anyway. The comparison lives in your IRA withdrawals, pension, interest, and any business or rental income.
02
The full ledger
Income tax is one line. Sales tax, vehicle tax, and property tax move the total, and they don't all point the same direction.
03
Residency done right
Virginia keeps taxing you until your domicile actually changes and you stop spending most of the year in a Virginia home. The year you move is a part-year return.
What we coordinate
The useful details need to work together.
- Side-by-side projection of retirement income and state tax under both residencies
- IRA and 401(k) withdrawal taxation in Virginia versus Tennessee
- The Virginia age deduction, and whether your income level actually gets it
- Property, sales, and vehicle taxes in the comparison, not just income tax
- Roth conversion timing if a move changes your tax picture
- Residency done right: domicile, the 183-day rule, and the year-of-move return
Representative situation
A Bristol, Virginia couple deciding if the line is worth crossing
Situation
A couple in their early 60s lives on the Virginia side with IRAs, a pension, a paid-off house, and family nearby. A neighbor swears they're losing money every year they stay. They want to know what staying actually costs.
Approach
We would project their retirement income and total state and local taxes under both residencies, including property, vehicle, and sales taxes, test whether Roth conversion timing changes either picture, and put the annual difference in dollars next to what the move would really mean for their life.
This representative situation is hypothetical and for educational purposes only. It is not based on, and should not be understood as referencing, any specific client or client experience.
Local proof
Where we are
Talley Wealth is based in Johnson City and works with families on both sides of the line, in person and virtually.
- Office: 203 Broyles Drive, Suite 301, Johnson City, TN 37601.
- Serving Bristol, Abingdon, and Southwest Virginia alongside the Tri-Cities.
- Reviews mentioned on this site are public Google reviews, not a promise of results.
Related next steps
Keep going from this decision.
Bristol financial advisor
The local page for Bristol families on both sides of the line.
Learn moreBristol retirement planning
Retirement income, Social Security, taxes, and timing for Bristol families.
Learn moreRoth conversion timing
How conversion windows interact with residency and retirement timing.
Learn moreCommon questions
Questions worth sorting out before you decide.
How much would we actually save by moving to the Tennessee side?
It depends almost entirely on your income mix. Virginia taxes IRA, 401(k), and most pension income at up to 5.75%, but does not tax Social Security. A household drawing heavily from retirement accounts can save thousands a year. A household living mostly on Social Security may save very little. We run it both ways with your real numbers.
Does Virginia tax Social Security?
No. Virginia does not tax Social Security benefits. If most of your retirement income is Social Security, moving for income-tax reasons alone may not change much.
What is the Virginia age deduction, and do we qualify?
Virginia allows a deduction of up to $12,000 per person at age 65 and older, but it phases out dollar-for-dollar once income passes $50,000 for singles or $75,000 combined for married couples. Families who saved well often phase out of it entirely, which is exactly when the Tennessee comparison starts to matter.
If we move, can Virginia still tax our retirement income?
Not once the move is real. Federal law prevents any state from taxing the retirement income of people who no longer live there. Virginia can question whether your domicile actually changed, so your license, voter registration, and where you actually spend the year should all match the move.
Is tax the only thing we should weigh?
No, and it shouldn't be. Taxes are one line in the decision, next to family, community, and the home you've built a life in. Our job is to put a real number on the tax line so you can weigh the rest honestly.
Get the real number before you decide.
The Explore Call is a short conversation about your situation. If the move math matters for you, we will know quickly.