CA to TX move, impact on taxes and residence?? Tax guidance?

[ivinsfan]

Quote:

Originally Posted by Aiming_4_55 Point taken on family... part of the project is to travel 3 - 5 days a week, so regardless of where I live, my time with family is impacted.

That's a rough schedule with young kids. I wish you all the best...

[Alan]

Quote:

Originally Posted by MichaelB I Am Not A Lawyer. California is aggressive, so is NY. I had multiple encounters with NY state tax authorities due to residency issues.

Perfect - thanks.

Even though I have not lived or even visited Louisiana since I retired in 2010 I still pay some LA State taxes even while living overseas because I have an unqualified pension paid by my ex-employer there, reported on a W2.

[Aiming_4_55]

Quote:

Originally Posted by ivinsfan That's a rough schedule with young kids. I wish you all the best...

Thanks. Most in my field travel extensively, at least 50%. I've been fortunate that I haven't for close to 10 years, but the last two months I've been all over the place, i.e. Bangalore & Mumbai, India; Amsterdam, Seattle, San Diego, Chicago, St Paul, and Texas.

It's a rough schedule but looking at how I can make the best of it. Mentally, I'm not ready for full ER and enjoy the work, so I feel fortunate for the time being.

[Aiming_4_55]

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Originally Posted by Scuba Kids that young are usually very resilient. I would move with the whole family, but keep your house in CA and rent it out. That way if you want to come back in a few years, you can either move back into your previous home or sell it and buy another property. My advice is do not sell your CA property if you think you may want to come back to CA. We made the mistake of selling ours when we were in PA, not knowing when we’d get the opportunity to come back to CA. The market had appreciated quite a bit, and we made a lot of money selling. Fast forward a year - we came back to CA. We bought another place in the same area, but it cost us $250K more than what we sold the previous one for, and our property tax base increased by over $500K, costing us an extra $5K+/year, a cost we will continue to have as long as we live here.

Agree on the kids and maintaining CA property. I still have property in other states, so I'm use to being a landlord. Thanks.

[DFDubb]

I've done this both directions for both states. We lived in TX and 1 of us started working a bunch in CA. While our home was in TX and the company was based in TX, it was pretty easy to avoid CA taxes. Eventually the time apart got to be too great and we opted to move to CA. Fast forward a few years and 1 of us started working a great deal back in TX while living in CA. We wanted to keep our CA home and officially moved back to TX, bought a house, both employed by TX companies, etc.....CA was relentless on proving that we were trying to cheat the system. For us, it was easier to simply sell our CA house and be done with it.

What you're wanting to do simply won't work and will be a huge fight that you ultimately won't win. I too would just move your family here.

[Scuba]

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Originally Posted by Aiming_4_55 Yes a showstopper in regard to taxes. If I moved the family and sold my property, and ER'd, CA wouldn't get anything.

You wouldn’t have to sell your property. When we moved to PA and rented our CA home out, we were not CA residents for that period of time.

[joeea]

Quote:

Originally Posted by Aiming_4_55 Any thoughts on how best to benefit from my situation? Any pitfalls?

From a taxes point of view you should hire a CPA versed in such tax avoidance, probably one in CA. Maybe one in TX.

There are certainly lifestyle issues that could be considered "pitfalls".

[Rustic23]

At the bottom of my list would be relocating kids! After 20 years military service I can tell you it is your attitude towards it that makes the difference. It's like when a kid falls down, if you rush to them a ask 'are you hurt' they will react one way, if you say pick yourself up, you'r not hurt. they react another.

We moved our kids in elementary school twice, junior high twice and high school once, (summer before her senior year) Both turned out ok. In fact I think better for it. My guess is there are more than a few on here that moved kids just as much, or were moved just as much.

[ivinsfan]

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Originally Posted by Rustic23 At the bottom of my list would be relocating kids! After 20 years military service I can tell you it is your attitude towards it that makes the difference. It's like when a kid falls down, if you rush to them a ask 'are you hurt' they will react one way, if you say pick yourself up, you'r not hurt. they react another. We moved our kids in elementary school twice, junior high twice and high school once, (summer before her senior year) Both turned out ok. In fact I think better for it. My guess is there are more than a few on here that moved kids just as much, or were moved just as much.

You're talking to one here...elementary school 5 different schools ( twice in mid-year as we moved from off-base to on-base housing), junior high twice including a public school in England (completely different set-up then the US) and high school twice. Maybe living apart for two years is the best of a complicated situation for the OP's family, but if it's really about the kids, that's putting the cart before the horse.

[Chuckanut]

Skip Texas and go straight to Arkansas. And don't tell anybody where you heard it, as I will deny everything.

[ocean view]

OP states that if they moved to TX, he would still spend some weeks in CA each month. Under CA sourcing rules, any income earned while on business travel in CA is taxable as non-resident income. If I recall, their de minimus threshold is pretty low.

I suggest the OP take a thorough read through FTB publication 1031, Guidelines for determining resident status
https://www.ftb.ca.gov/forms/2017/17_1031.pdf

[bj345]

OP, what did you decide to do. I'm curious because I'm considering a similar move. Of course everyone in tow would go, so less risk of CA clawing back taxes.

[Aiming_4_55]

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Originally Posted by bj345 OP, what did you decide to do. I'm curious because I'm considering a similar move. Of course everyone in tow would go, so less risk of CA clawing back taxes.

Hey bj345 - OP here. We are staying in SoCA for the school year, so at least until June 2019. With elementary age kids, I was not ready to make the change. Further research into the Texas school system as preliminary GreatSchool.org ratings was not so good for our area. Ultimately we'll move as a family unit, wondering if I want to do the travel but enjoy the new tech project, so it's challenging me on the OMY front too. I was first targeting RE in 2019, but now it could be 2019 - 2021. Being 49 now, I'm ok with a few more years of work if it's not taking away too much from family. Timing is not $$, more of career enjoyment and maybe not sure what I want to retire too.

With young kids, be sure to research the school system before buying. Also, city/county/state fees, property taxes and high auto insurance/electric bill may impact your budget savings. Many cost savings in state income tax, housing cost, auto gas, etc. so it could still be a good move especially if it's to get closer to family.

[bj345]

Sounds like a good plan. We're considering 2019, too, but who knows with this economy. Went to orchard hardware store today and saw the store closing sale, even in a hot economy. What'll happen in a down one. I suspect many more stores will go bust, eg Sears, penney's, bed bath & beyond.

[Aiming_4_55]

Quote:

Originally Posted by bj345 Sounds like a good plan. We're considering 2019, too, but who knows with this economy. Went to orchard hardware store today and saw the store closing sale, even in a hot economy. What'll happen in a down one. I suspect many more stores will go bust, eg Sears, penney's, bed bath & beyond.

Razor thin profit margins making it more difficult to cover expenses along with the increase in livable wages. Commerical rent is crazy expensive. Internet and technology created alot of new opportunities but hurting the legacy retailers. A trip to the store, i.e. travel time, gas, searching for the item if it's in stock, etc. vs. ordering online. As a consumer, I save time, gas, and $$ buying things online with free or inexpensive shipping. I would pay $5 to 10 for shipping if I can save an hour of time. Just takes some planning.

[Helena]

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After reading posts here how the California tax authority won't let you go... now I understand where the Eagles got their idea for "Hotel California"... "you can check out anytime you like, but you can never leave."

Glad I'm a native Texan

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[Helena]

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Originally Posted by Chuckanut Skip Texas and go straight to Arkansas. And don't tell anybody where you heard it, as I will deny everything.

Not only does Arkansas has a state income tax... it also has a state personal property tax [in addition to real estate property taxes.] What a hassle.

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[catotx]

Quote:

Originally Posted by bj345 OP, what did you decide to do. I'm curious because I'm considering a similar move. Of course everyone in tow would go, so less risk of CA clawing back taxes.

I moved out of SF bay area last year to FIRE in GA. Sold my house and brought everything along with me. I don't think the FTB can get me for anything this year!

My kids are in elementary and middle schools here and they have adapted well.

[Walt34]

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Originally Posted by Helena Not only does Arkansas has a state income tax... it also has a state personal property tax [in addition to real estate property taxes.] What a hassle.

It depends. WV also has a personal property tax and real estate taxes and MD (where we used to live) does not have personal property taxes. BUT... the total tax burden is about a third of even less of what taxes would be if we had remained in MD.

So I think it's a good deal here.

[Helena]

Quote:

Originally Posted by Walt34 It depends. WV also has a personal property tax and real estate taxes and MD (where we used to live) does not have personal property taxes. BUT... the total tax burden is about a third of even less of what taxes would be if we had remained in MD. So I think it's a good deal here.

That's what I was told about Arkansas... that the total of all three different taxes [income tax, personal property tax and real estate tax] is below what I pay here in Texas for just the local real estate tax. But I did the math, and in my case, I pay less in Texas. And there is also the hassle factor. I don't want to spend my time and effort dealing with bureaucrats, filling out tax forms. etc [all that extra bureaucracy also costs the state.]

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