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Old 09-17-2020, 02:40 PM   #61
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Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 1,812
As a long time resident in Illinois, I think the combined tax rates are not horrible. I am speaking as a retiree with 98% incomes being covered by IRA and SS benefits. That makes my state income tax zero. This is not right IMO. I should pay something. My sales tax is no 10% but 7.75%. Food and drugs are at a much, much lower level. and real estate tax is around 2.2% of actual fair market sales value (not adjusted value or with homestead exemption applied, etc. ) Note: I didn't say assessed value which can be manipulated in so many ways from location to location and state to state it makes meaningful comparison difficult.

Is it the least expensive taxed as a whole? No. Does the state need something to provide services? Yes. The bottom line is it probably not as bad today as people make it out to be. Virtually all of DW's family lives here as does our DS1 and his family. We need to be close. No ands, ifs, or buts about it. Wisconsin is our only other close option. If Illinois decides to change the income tax to include retirement incomes, we might have to look at it.

As a whole, part time residents regardless of being "full time residents" in an other state, do have to pay Illinois income tax on income earned here. Such as doing business here, employed here, have rental income from an Illinois rental, etc. There is an exception for a few bordering states that have an agreement with Illinois.
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Old 09-17-2020, 05:57 PM   #62
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Join Date: May 2014
Location: Big Sky Country, Montana
Posts: 156
Excerpt from a letter to my sister recently when they had the same idea...

ďWe have also looked for a tax friendly state where we might have a primary residence and leave this for our second home. I have been looking at that for a couple of years now and itís a lot more complicated than I initially thought. I worked alongside an income tax auditor for the State of Montana who regularly did residency audits and some of the things she told me kind of scared me. She talked about even looking at peoples cell phone records to tell where they were most of the time, and at their refrigerator contents, gym memberships, etc. I also ran into an entire field of law I didnít even know existed. ďResidency Tax PlanningĒ. I got a lot of valuable information from a Palm Springs Law firm you might take a look at:



They have a lot of articles about this. Worth a look. I didnít even know I probably need someone like them to validate my plan. I donít even know whether there is anyone like them in Montana. Iím still looking.

I also found it was difficult to determine how much actual savings we would get by moving even after being in the tax business here for the last 20 years. States have so many ways of taxing us that arenít obvious. Sales tax, property tax, vehicle tax, estate tax, exemptions on certain retirement income or not, use tax, utility costs, and cost of living differences. Iíve found it nearly impossible to determine how much I would actually be saving after all that, commuting costs, and costs of maintaining two separate homes. So we are still here and likely will be for a while. Iím probably going to pay Montana a good chunk of money as we do Roth IRA conversions over the next 6 years, but its still cheaper for us at this point than moving and trying to juggle two homes, or running afoul of one or more tax auditors.Ē
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