Mentor RIA Consulting - Allowing you to focus on what you do best
RSS

Recent Posts

Sales Incentives: Who Really Pays?
Could an IRA Trust Work for Your Plan?
Is the Pandemic Changing Your Plans?
Form CRS: Prop or Flop?
Using 401(k) Loans for Short Term Liquidity

Categories

Clients
Compliance
General
Investing
Planning
RIA Business
Training
powered by

My Blog

Taxes and Changing Your State of Residence

Much has been made of the “trend” for higher earners to move from their high tax home states to other states with no income tax or at least lower income and property tax burdens. Opinions vary as to exactly how much of a trend this concept might be with some sources believing that the trend is not all that strong. Certainly one big factor working against making such a change (apart from inertia) is compliance with all the steps necessary to be certain the mover has in fact severed enough ties to escape continued tax liability to the original state. This is because many states are strictly enforcing their rules and investigating the activities of those high earners who do make a move.
The basic steps are fairly obvious: change your primary residence, voting and vehicle registration, medical professionals such as doctors and dentists, even your library card. However, even with these changes, it may not be enough under some circumstances. Retaining a home you own in the old state can be problematic as can continued employment with the same employer when you work remotely and the employer does not have a physical presence in the new state. If you are present in the old state for half the year – 183 days – you will likely be considered to still be a resident. And if your digital footprint shows you present in the old state, that is proof enough. Another factor will be the location of the family – leaving your kids in school in the old state is an indicator that the move is not (yet) permanent. So many things can possibly trip you up.
Bottom line: consult a professional about what to do and when and then do it. Cut all ties or as many of them as you can with the old state to help establish you really have left and cannot be found taxable there.


0 Comments to Taxes and Changing Your State of Residence:

Comments RSS

Add a Comment

Your Name:
Email Address: (Required)
Website:
Comment:
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment
Website Builder provided by  Vistaprint