Tennessee Tax Strategy: Maximizing Zero-Tax Benefits
Tennessee has no state income tax—the Hall Tax on investment income was eliminated. But federal taxes still apply. Complete your tax freedom with Section 7702.
The Tennessee Advantage
Tennessee eliminated its last income tax (the Hall Tax) in 2021. But federal taxes can still take up to 37% of your retirement income.
✅ The Good News
- 0% state income tax
- Hall Tax eliminated in 2021
- No local income taxes
- Growing economy and job market
⚠️ The Challenge
- Federal taxes still apply (up to 37%)
- All 401(k)/IRA distributions federally taxed
- Sales tax is high (9.55% in some areas)
- Healthcare costs rising
Tennessee Tax By The Numbers
Section 7702: Your Tax Freedom Solution
Section 7702 of the IRS tax code creates a powerful opportunity: access your retirement funds through policy loans that are completely tax-free—at both federal and state levels. For Tennessee residents, this means escaping both the state tax burden and federal taxation entirely.
Federal Tax-Free
Policy loans bypass federal income tax entirely. No 22-37% federal tax on your retirement income.
State Tax-Free
Tennessee already has no income tax—Section 7702 addresses the federal burden that remains.
Tennessee Professionals We Typically Serve
Music Industry Professionals
Nashville executives, artists, and producers with significant royalty income
Healthcare Professionals
Physicians at HCA, Vanderbilt, and other major Tennessee health systems
Healthcare Executives
Leaders at Tennessee's major healthcare corporations
Automotive Industry
Executives and engineers at Nissan, GM, and suppliers
Finance Professionals
Growing financial services sector in Nashville
Real Estate Developers
Developers capitalizing on Tennessee's growth
Tennessee Areas We Serve
Matt Nye's Recommendation
"Tennessee's elimination of the Hall Tax made it a completely tax-free state for income. Combined with no income tax, it's one of the best states in America for wealth building."
"But here's the catch: federal taxes don't care about Tennessee's tax-free status. The IRS still takes 22-37% of every 401(k) dollar you withdraw."
"For my Nashville healthcare executives, music industry clients, and Memphis professionals, Section 7702 is the logical next step. You've already chosen a tax-free state. Now choose a tax-free retirement vehicle. That's true financial freedom."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
Tennessee just eliminated the Hall Tax. Why do I need Section 7702?
Great news—Tennessee is now completely state-tax-free for income! But federal taxes still apply to your 401(k) and IRA withdrawals. Section 7702 eliminates federal taxes, giving you complete tax freedom.
I moved from a high-tax state to Tennessee. Is that enough?
You've saved significantly on state taxes—well done! But your traditional retirement accounts are still federally taxed at up to 37%. Section 7702 completes your tax strategy.
Music royalties are complicated. How does Section 7702 help?
Royalty income is federally taxable. Use that income to fund Section 7702 policies, then access tax-free retirement income later. You're converting taxable royalties into tax-free retirement.
Tennessee has high sales taxes. Does that affect Section 7702?
Sales tax applies to purchases, not income. Section 7702 policy loans give you more spendable income by eliminating income taxes, which means more purchasing power despite sales taxes.
What about healthcare industry compensation in Tennessee?
Nashville is 'Healthcare Capital of the USA.' High HCA, Vanderbilt, and other healthcare compensation means high federal taxes. Section 7702 provides tax-free retirement income for healthcare professionals.
Ready for Tennessee Tax Freedom?
Discover how Section 7702 can eliminate federal taxes on your retirement income. Schedule your free analysis today.
Schedule Your Tennessee Tax Analysis →Free 30-minute consultation. No obligation. No sales pressure.