Moving Residency for Tax Purposes - Anyone Done This?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of people do this. Keep track of credit card statements in case you have to prove that you were actually there for 6 months.

Because OP is planning to keep their place here, no doubt will be here quite a bit, will continue to rely on our services, but wants to avoid paying taxes. Then they'll complain about how things are here, without putting their money where their mouth is. Not to mention they're likely to cheat and be here more than six months a year.

When doing your math, OP, don't forget you lose the homestead exemption on your house, the opportunity for a 50 percent reduction in your property taxes through the senior citizen discount, the right to register your car here and get zoned parking, etc. etc. etc. Plus it's just a shitty thing to do to the city and it makes you a cheapo. If you have to change your residency to avoid city taxes you're not comfortable enough to retire.

Yes, we have a second home in a much more friendly tax state. No, we don't consider this.

Well, you’re a fool.

Maybe. But I'm sure as hell not gonna start counting my days to save taxes.

OP isn't saying "we're finally empty nesters and can move to where we want and away from DC." Nope. She's saying that as empty nester she thinks it's "doable" to be here less than six months. So yeah it's all about structuring your very whereabouts around state incomes taxes. Pretty sad.

Not really. Assuming you like it in DC and like the other location, I think it could be a lot of fun and very freeing!

Except that's not what OP is saying. What about "we think it's doable" do you not understand? And what's "freeing" about counting your days?

DP: FOr us, a potential savings of $5-7M in a few years.

Plus with travel, for us it would be about proving we are not in "the current home state" for more than 6 months per year. We travel 3-4 months of year so it's only about 2-3 months more of "not being in the state".

I agree for most it doesn't matter. But for higher income, we are already taxed out the wazoo

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of people do this. Keep track of credit card statements in case you have to prove that you were actually there for 6 months.

Exactly. Local tech CEO Saylor got busted for this. In his case, he posted photos on Insta from his yacht in DC on days he claimed he was not in DC:

https://www.cnbc.com/2024/06/03/bitcoin-billionaire-michael-saylor-settles-dc-tax-fraud-case-for-40-million.html

People have yachts "in DC"? This blows my mind. Doesn't time on a yacht mean like no location? Maritime?

Not if you are moored to a pier in DC.

[Anonymous]

Why would you do that?

You voted in these high taxes and social policies.

Stay and pay your fair share for the things you voted in.

Don't go to another state with better policies to avoid paying for the policies you voted in for everyone else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of people do this. Keep track of credit card statements in case you have to prove that you were actually there for 6 months.

Exactly. Local tech CEO Saylor got busted for this. In his case, he posted photos on Insta from his yacht in DC on days he claimed he was not in DC:

https://www.cnbc.com/2024/06/03/bitcoin-billionaire-michael-saylor-settles-dc-tax-fraud-case-for-40-million.html

Well you actually have to move and reside in the other place for 6months+.

We travel a lot so for us, proving we are somewhere 6 months of the year would be difficult, as we spend 3-4 months traveling and would want to split the rest between 2 places.

OP again. We plan to travel a lot as well. But, as a PP suggested, the travel time out of the country can count as part of your 183 days in the new residence. Looking at it that way, I don't anticipate this being difficult at all. Again, our kids will be away at college or on their own by the time this is implemented.

To those of you who think this is somehow wrong: have you never talked to a financial planner or tax attorney? This is the first thing they suggest, especially if you already own a vacation home in a lower tax bracket state. As one told us bluntly, "you don't want to die a DC resident if you can help it."

[Anonymous]

Anonymous wrote:Why would you do that?

You voted in these high taxes and social policies.

Stay and pay your fair share for the things you voted in.

Don't go to another state with better policies to avoid paying for the policies you voted in for everyone else.

Actually, I did not! I'm stuck with them, however.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My retired relatives do this. They have a really nice Airstream trailer and spend at least 6 months of the year at an RV park in Florida.

You need to register your vehicles there, change your driver's license, and voting registration to help establish tax residency. One thing to watch for is that in low income tax states, the government finds other ways to raise revenue, like through property tax, personal property tax, or sales tax. For example Tennessee has no state income tax but sales tax is 7-9% depending on what city you're in. Texas has no state income tax but property tax is about 2% (around the DMV it's around 1%).

Whenever someone gives the sales tax makes up for it argument I know they are a low earner and haven’t paid high taxes.

Many of us are paying tens of thousands or even hundreds of thousands a year in state income taxes. No, an extra 3% in sales tax on consumer goods and restaurant meals will NOT make up for the $80k I paid last year to my state.

Now if you’re a low earner and don’t pay much in income tax then I can see that you might be concerned with sales tax.

Feel the same way about the MD county tax when people say “But what about the VA car tax….”

Sorry, I don’t care about a $2K car tax if my county tax alone is $75K

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My retired relatives do this. They have a really nice Airstream trailer and spend at least 6 months of the year at an RV park in Florida.

You need to register your vehicles there, change your driver's license, and voting registration to help establish tax residency. One thing to watch for is that in low income tax states, the government finds other ways to raise revenue, like through property tax, personal property tax, or sales tax. For example Tennessee has no state income tax but sales tax is 7-9% depending on what city you're in. Texas has no state income tax but property tax is about 2% (around the DMV it's around 1%).

Whenever someone gives the sales tax makes up for it argument I know they are a low earner and haven’t paid high taxes.

Many of us are paying tens of thousands or even hundreds of thousands a year in state income taxes. No, an extra 3% in sales tax on consumer goods and restaurant meals will NOT make up for the $80k I paid last year to my state.

Now if you’re a low earner and don’t pay much in income tax then I can see that you might be concerned with sales tax.

Feel the same way about the MD county tax when people say “But what about the VA car tax….”

Sorry, I don’t care about a $2K car tax if my county tax alone is $75K

This is true, however, for us, we are looking at ACA insurance because we plan to retire early, and ACA is more expensive in VA. Plus, MD has better ACA plans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My retired relatives do this. They have a really nice Airstream trailer and spend at least 6 months of the year at an RV park in Florida.

You need to register your vehicles there, change your driver's license, and voting registration to help establish tax residency. One thing to watch for is that in low income tax states, the government finds other ways to raise revenue, like through property tax, personal property tax, or sales tax. For example Tennessee has no state income tax but sales tax is 7-9% depending on what city you're in. Texas has no state income tax but property tax is about 2% (around the DMV it's around 1%).

Whenever someone gives the sales tax makes up for it argument I know they are a low earner and haven’t paid high taxes.

Many of us are paying tens of thousands or even hundreds of thousands a year in state income taxes. No, an extra 3% in sales tax on consumer goods and restaurant meals will NOT make up for the $80k I paid last year to my state.

Now if you’re a low earner and don’t pay much in income tax then I can see that you might be concerned with sales tax.

Feel the same way about the MD county tax when people say “But what about the VA car tax….”

Sorry, I don’t care about a $2K car tax if my county tax alone is $75K

This is true, however, for us, we are looking at ACA insurance because we plan to retire early, and ACA is more expensive in VA. Plus, MD has better ACA plans.

We moved to a state where the state will more likely have an ACA like marketplace if the ACA is dismantled. It happens to be a higher tax state.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My retired relatives do this. They have a really nice Airstream trailer and spend at least 6 months of the year at an RV park in Florida.

You need to register your vehicles there, change your driver's license, and voting registration to help establish tax residency. One thing to watch for is that in low income tax states, the government finds other ways to raise revenue, like through property tax, personal property tax, or sales tax. For example Tennessee has no state income tax but sales tax is 7-9% depending on what city you're in. Texas has no state income tax but property tax is about 2% (around the DMV it's around 1%).

Whenever someone gives the sales tax makes up for it argument I know they are a low earner and haven’t paid high taxes.

Many of us are paying tens of thousands or even hundreds of thousands a year in state income taxes. No, an extra 3% in sales tax on consumer goods and restaurant meals will NOT make up for the $80k I paid last year to my state.

Now if you’re a low earner and don’t pay much in income tax then I can see that you might be concerned with sales tax.

Feel the same way about the MD county tax when people say “But what about the VA car tax….”

Sorry, I don’t care about a $2K car tax if my county tax alone is $75K

This is true, however, for us, we are looking at ACA insurance because we plan to retire early, and ACA is more expensive in VA. Plus, MD has better ACA plans.

We moved to a state where the state will more likely have an ACA like marketplace if the ACA is dismantled. It happens to be a higher tax state.

I don't think ACA will be dismantled without a replacement because even some Rs refused to gut it without a replacement, but yea, if that should ever happen, we'd have to move to some place like MA where they have universal healthcare, thanks to a former R governor. How ironic is that.

[Anonymous]

The Washingtonian published a chart on the average tax burden for someone earning like $250k and $500k and interestingly DC was second only to Arlington for lowest overall tax burden (for income, sales and property). Lower than all the other local MD and VA counties.

Again…both MD and DC really fall down when you factor estate/inheritance taxes.

[Anonymous]

Anonymous wrote:The Washingtonian published a chart on the average tax burden for someone earning like $250k and $500k and interestingly DC was second only to Arlington for lowest overall tax burden (for income, sales and property). Lower than all the other local MD and VA counties.

Again…both MD and DC really fall down when you factor estate/inheritance taxes.

Yes except we aren’t talking about people making $250K to $500K if we’re talking about saving high tens of thousands to hundreds of thousands in state taxes a year….

DC has a 10.75% income tax once you hit $1M+

[Anonymous]

Anonymous wrote:

Anonymous wrote:The Washingtonian published a chart on the average tax burden for someone earning like $250k and $500k and interestingly DC was second only to Arlington for lowest overall tax burden (for income, sales and property). Lower than all the other local MD and VA counties.

Again…both MD and DC really fall down when you factor estate/inheritance taxes.

Yes except we aren’t talking about people making $250K to $500K if we’re talking about saving high tens of thousands to hundreds of thousands in state taxes a year….

DC has a 10.75% income tax once you hit $1M+

I don’t get the sense OP is in that tax bracket…but maybe I am wrong.

They probably wouldn’t be asking DCUM for advice on the topic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The Washingtonian published a chart on the average tax burden for someone earning like $250k and $500k and interestingly DC was second only to Arlington for lowest overall tax burden (for income, sales and property). Lower than all the other local MD and VA counties.

Again…both MD and DC really fall down when you factor estate/inheritance taxes.

Yes except we aren’t talking about people making $250K to $500K if we’re talking about saving high tens of thousands to hundreds of thousands in state taxes a year….

DC has a 10.75% income tax once you hit $1M+

I don’t get the sense OP is in that tax bracket…but maybe I am wrong.

They probably wouldn’t be asking DCUM for advice on the topic.

OP here. That's correct. We're more like the $500K annual income bracket. Our biggest concern is avoiding estate taxes.

[Anonymous]

I think VA is considered generally average for taxes. No estate taxes.

[Anonymous]

PA has very low taxes and Poconos houses are used too.