How to reduce state tax surprises

1. Review state tax withholding: Working retirees should confirm payroll withholding reflects both federal and state obligations. If needed, increase state withholding or quarterly estimated tax payments.

2. Maximize Health Savings Accounts (HSAs): The new law expands HSA eligibility to include Bronze health plans. In states that follow federal HSA rules, maximizing contributions can reduce AGI for both federal and state taxes.

3. Adjust large taxable moves: If your state doesn’t allow the senior bonus deduction, consider scaling back Roth conversions or asset sales to keep state taxes manageable.