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

[Scuba]

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]

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]

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]

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]

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]

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]

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]

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]

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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