7 Retirement Mistakes Virginia Newcomers Make That Lead to Regret

What could go wrong in a state that never taxes Social Security?

Plenty, and Virginia doesn’t wait long to show you.

These are the retirement mistakes Virginia newcomers make.

Note: This is general information, not financial or tax advice. Confirm the details with a professional before acting.

1. Assuming Every Dollar Rides Free

Virginia never taxes Social Security, and that headline sells a lot of moving trucks.

The catch arrives with your first state return.

Withdrawals from a 401(k) or an individual retirement account (IRA), plus most pension income, count as regular income, and Virginia’s top rate of 5.75% kicks in at just $17,001.

The brackets sit so low that nearly every retiree pays the top rate on most of their income.

Pull $60,000 from savings in one year, and the state’s share runs close to $3,200.

Plan withdrawals with that bite in mind.

2. Losing the Age Deduction

Virginians 65 and older can subtract up to $12,000 each from their taxable income.

Few newcomers realize the deduction shrinks a dollar for every dollar of income above $50,000 for single filers, or $75,000 for married couples.

One Roth conversion or a big home-sale year can wipe the whole thing out.

Run the numbers: A single filer with $58,000 of counted income keeps only $4,000 of the deduction.

The income test uses your federal adjusted gross income with taxable Social Security stripped back out, a detail that trips up do-it-yourself filers.

Timing large withdrawals around that phase-out saves thousands over a retirement.

3. Forgetting Car Tax

Virginia localities tax the vehicles you own, year after year.

Fairfax County charges $4.57 per $100 of your car’s assessed value, meaning the value the county assigns from a standard pricing guide.

On a $30,000 SUV, that works out to roughly $1,370 a year before relief programs trim the bill.

A state program does shave part of the tax on the first $20,000 of value.

Bills land each fall, and localities from Alexandria to Virginia Beach set their own rates.

Newcomers from states without a car tax find that first October bill… let’s say, memorable.

4. Skipping the Tax Relief Application

Most Virginia counties and cities offer older homeowners a break on real estate taxes, but nobody signs you up automatically.

Fairfax County alone forgives some or all of the bill for homeowners 65 and older with combined income up to $90,000.

Every locality sets its own limits, paperwork, and deadlines.

Deferral options exist too, letting some homeowners postpone the tax until their home sells.

Retirees who never ask hand the county thousands they could have kept.

5. Missing the Military Subtraction

Northern Virginia and Hampton Roads are full of military retirees, and many still miss this one break.

Veterans can subtract up to $40,000 of military retirement pay from their Virginia taxable income.

The old rule limited the break to those 55 and older.

That age requirement is gone, and Survivor Benefit Plan payments to a surviving spouse qualify too.

That cap reached its full $40,000 for 2025 returns, so veterans filing their first Virginia return this spring got the whole break.

The subtraction won't claim itself, so raise it with whoever prepares your return.

6. Budgeting for One Virginia

Virginia runs on several housing markets, not one.

The median sale price in Fairfax County sits around $813,000, while Roanoke homes sell for about $237,000.

Same state, nearly three and a half times the price.

Newcomers who assume a Northern Virginia budget applies everywhere overpay, and anyone stretching a Roanoke budget toward Arlington is in for a rude surprise.

Williamsburg, Winchester, and the Shenandoah Valley sit in the comfortable middle, while Charlottesville leans expensive thanks to the university and the wineries.

Pick the region first, then your house.

7. Filing on the Federal Clock

Virginia returns aren't due April 15.

The state gives you until May 1, and it grants an automatic six-month filing extension with no form required.

One caveat: The extension covers filing, not paying.

Estimated payments follow their own calendar too, so ask your preparer to map out the first full year.

Grocery Tax Still Applies

Virginia charges a reduced 1% sales tax on groceries, and lawmakers keep debating whether to kill it.

Most states skip grocery taxes entirely, so the line item catches newcomers off guard.

It's small on any single receipt.

And it never goes away, cart after cart, year after year.

Budget a few dollars a month for it and move on.

Age Deduction Fine Print

The age deduction carries an either-or rule: You can't claim it alongside Virginia's disability subtraction.

Couples where one spouse draws disability income should run both math paths before filing.

Ten minutes with a calculator can be worth a few hundred dollars.