Virginia Tax Strategy: Commonwealth Freedom Planning
Virginia has a progressive income tax up to 5.75%. Combined with federal taxes, over 42% can go to government. Section 7702 provides tax-free access to your retirement funds.
The Virginia Tax Challenge
Virginia's 5.75% top rate combined with federal taxes creates substantial retirement income taxation. The DC area's high incomes mean large tax bills.
✅ The Good News
- Strong federal contractor economy
- Growing tech sector in NoVA
- Diverse economy from coast to mountains
⚠️ The Challenge
- Top income rate 5.75% on retirement distributions
- Combined state/federal can exceed 42%
- High cost of living in Northern Virginia
Virginia 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 Virginia 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
No Virginia state income tax on policy loans. Your retirement income stays tax-free at the state level.
Virginia Professionals We Typically Serve
Federal Contractors
Defense and government contractor executives
NoVA Tech Executives
Amazon HQ2 and tech corridor leadership
Naval Leaders
Norfolk and Hampton Roads military retirees
Healthcare Professionals
Inova, VCU, and regional specialists
Virginia Areas We Serve
Matt Nye's Recommendation
"Virginia is the gateway to federal power—and federal contractors have built substantial wealth here. But 5.75% state taxes plus federal means over 42% of your 401(k) goes to government."
"For defense contractors, Amazon HQ2 executives, and military retirees, that burden is significant. Northern Virginia costs are already high. Why send 42% to government too?"
"Section 7702 is how Virginians keep their success. Tax-free retirement income means your decades of service—federal, military, or private sector—pay off for you. That is Commonwealth values."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
How does Section 7702 help Virginia residents?
Section 7702 allows you to access retirement funds completely tax-free—avoiding Virginia's 5.75% rate plus federal taxes. This can mean 40%+ more retirement income.
I am a federal contractor with a pension coming. Is this still valuable?
Very valuable. Your federal pension is taxable. Section 7702 provides tax-free retirement income to complement your pension and reduce your overall tax burden.
NoVA is expensive. Does tax-free income make a difference?
A substantial difference. Northern Virginia costs are among the highest in the country. Tax-free retirement income means more cash flow for the lifestyle.
I am retiring from military service. How does this help?
Military retirement pay is taxable in Virginia. Section 7702 provides additional tax-free income to supplement your military pension. The combination is powerful.
Ready for Virginia Tax Freedom?
Discover how Section 7702 can eliminate both state and federal taxes on your retirement income. Schedule your free analysis today.
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