Green Mountain Greenbacks: Financial Considerations When Moving to Vermont
What did you move to Vermont for? Let us count the ways. It probably started with those images of pristine forests and lakes, rivers, and mountains offering refuge from the hum and drum of daily life in crowded communities when nature has been paved and packaged into zoos, pocket parks, and landscaped shopping centers. It may have then been the promise of an old-school New England lifestyle, where friendly conversations are the norm at the local coffee house or watering hole. Toss in the eclectic foodie culture blended in a long tradition of craft breweries, artisanal ice cream stores, and organic food grown by farmers committed to sustainable agriculture. Aye Yup (Vermonter for ‘yes’) we get it. You’ve arrived in Vermont to live the good life envied by those you left behind who soon may end up on your doorstep. While these things are true, it’s also true that there’s no free lunch (ice cream or craft beer). You need to keep on top of your money.
Every region has its own quirks when it comes to financial matters. Watching your greenbacks in the Green Mountain State is no different. Obviously, many things will be altered at the superficial level. You’ll see different gas prices and grocery prices and pay for snow removal and re-grading your driveway from time to time, after the winter thaw has pushed it up and down a few times. But then there are the more subtle expenses, the ones that really can change your overall financial picture. It’s not that you aren’t going to pay attention to things like taxes or what the wealth management picture looks like in your new home state — of course, you will. We just want to be sure you have a head start on these essential concerns before settling in so you can do what all prudent people do and be prepared for the financial facts in Vermont.
The Tax Picture
Like many states in the country, Vermont has a progressive income tax structure intended to shift social costs as one’s income grows with the goal of creating a fair and equitable burden. Different tax brackets can expect to see a different percentage of their earnings taxed, and as with all things, there are mitigating factors to consider. Here’s how it looks for single taxpayers living and working in the Green Mountain State: 3.35% on the first $40,350 of taxable income; 6.6% between $40,351 and $97,800; 7.6% between $97,801 and $204,000; and 8.75% on taxable income over $204,000. Married couples can expect to see the same rate scale, albeit at levels far below double the earnings (i.e., the top rate hits at $248,350 for couples instead of $408K). Consult with a tax professional to see it makes more sense to file separately or jointly. And, yes, there are deductions to explore, so again, talk to your accountant for sure.
Doing Business in Vermont
If you are either making big purchases for your business or will be selling things in the Green Mountain State, you will want to know the expenses that may be taxed. Corporate earnings taxes come in three brackets: 6% for the first $10K, 7% for anything from $10K-$25K, and 8% for anything over $25K. Effectively, if you’re doing serious business, think 8%. Sales tax is set at 6% across the board, except in a few localities where an additional 1% is added. This is important to keep in mind when you are either pricing sellable goods for your business or need to make substantial in-state purchases to service your business. Knowing these numbers up front can be very helpful for strategizing and planning how you will both acquire what you need and move product of your own. Keep in mind that other expenses such as utilities and transportation can vary greatly from what you would find in other parts of the country, so again, plan accordingly.
Wealth Management and Investing
There are lots of ways to make your money grow, and Vermont has great options to take a look at. For starters, consider the tried-and-true system of wealth management. The Burlington area has several excellent firms available to watch over your finances and ensure they produce good returns; however, every small town has skilled financial advisors nearby available to help. Many are “rural refugees” seeking the peace and quiet of country life away from high-pressure careers in financial service industries. These are remarkably talented and well-educated people who enjoy helping their neighbors in a less wel-compensated, but more satisfying job. But there are also other types of investment opportunities outside of the conventional financial strategies. The local and regional startup community hosts several angel investment firms with the chance to either join in with your money or seek opportunities for your growth by pitching business plans to a receptive audience. There are plenty of great ways here in the Green Mountain State to put your hard-earned greenbacks to work!