DW and I are about to encounter a situation that may have significant state income tax consequences. I'm hopeful somebody here has encountered this or something similar, or can at least refer me to a more tax specific site for research.
The details:
Starting in the next month or so, we'll both be WA state residents. However, I'll be retaining my CA job for the foreseeable future. I'll have a residence in both CA and WA, renting a room close to my CA employer. However, I'll be spending over half my time physically in WA - probably closer to 75%. I'll be working my CA job both physically in CA, as well as remotely in WA.
My wife will be quitting her CA job, and likely picking one up in WA where she'll reside full time.
Question #1: With no state income tax in WA, what if any strategies might we take to minimize CA state income tax while I'm still employed there, and my wife is working in WA? Income will be heavily slanted on my side, if that makes any difference - likely 80/20 me/her. My guess is, all my CA income will be subject to CA income tax - but I'm hopeful, none of hers will be. I'm also not sure how we should file in this circumstance - separate/joint, for Federal and/or State.
Question #2: I'll be severing all ties with CA sometime next year, leaving my job and part-time residence in CA. Given my residency in WA, does all of our state tax liability to CA end upon my separation from employment and relinquishing my rental there? Reason being, we'll be drawing from 457 and 72t funds after my separation, and I don't want CA getting any $$ from those withdrawals.
The details:
Starting in the next month or so, we'll both be WA state residents. However, I'll be retaining my CA job for the foreseeable future. I'll have a residence in both CA and WA, renting a room close to my CA employer. However, I'll be spending over half my time physically in WA - probably closer to 75%. I'll be working my CA job both physically in CA, as well as remotely in WA.
My wife will be quitting her CA job, and likely picking one up in WA where she'll reside full time.
Question #1: With no state income tax in WA, what if any strategies might we take to minimize CA state income tax while I'm still employed there, and my wife is working in WA? Income will be heavily slanted on my side, if that makes any difference - likely 80/20 me/her. My guess is, all my CA income will be subject to CA income tax - but I'm hopeful, none of hers will be. I'm also not sure how we should file in this circumstance - separate/joint, for Federal and/or State.
Question #2: I'll be severing all ties with CA sometime next year, leaving my job and part-time residence in CA. Given my residency in WA, does all of our state tax liability to CA end upon my separation from employment and relinquishing my rental there? Reason being, we'll be drawing from 457 and 72t funds after my separation, and I don't want CA getting any $$ from those withdrawals.