Taxes and unearned income

[lynxville]

Talking with a freind of mine this weekend, I mentioned to him I might become a Florida resident because there is no state tax. He said he doesn't pay any tax in Wi. on a 43k SS and retirement income. He said this is unearned income. I am gonna run this buy my accountant, but whats the opionion about this?

[FIRE'd@51]

Don't know about WI specifically, but your friend may well be correct. Most states, but not all, exempt SS from taxation, and some do not tax pensions. A few (PA comes to mind) do not tax IRA withdrawals. So it varies on a state-by-state basis.

[2B]

Florida has some personal property taxes that may get you if you become a Florida resident. If your goal is to be a resident of a tax friendly state, consider Texas. There is no income tax or personal property tax although the state has an oppressive property tax.

I'm planning on eliminating my home ownership in the state and become a "visitor" of other states. I'll have a mail box in Texas and possibly a very cheap "flop" for when we come back to Houston.

[REWahoo]

Quote:

Originally Posted by 2B If your goal is to be a resident of a tax friendly state, consider Texas. There is no income tax or personal property tax although the state has an oppressive property tax. I'm planning on eliminating my home ownership in the state and become a "visitor" of other states. I'll have a mail box in Texas and possibly a very cheap "flop" for when we come back to Houston.

2B has it all figured out: Texas is a great place to retire - as long as you don't live there.

[FIRE'd@51]

Quote:

Originally Posted by FIRE'd@51 Don't know about WI specifically, but your friend may well be correct. Most states, but not all, exempt SS from taxation, and some do not tax pensions. A few (PA comes to mind) do not tax IRA withdrawals. So it varies on a state-by-state basis.

Found the link I was looking for before:

Taxes by State

[DallasFH]

Quote:

Originally Posted by 2B Florida has some personal property taxes that may get you if you become a Florida resident. If your goal is to be a resident of a tax friendly state, consider Texas. There is no income tax or personal property tax although the state has an oppressive property tax. I'm planning on eliminating my home ownership in the state and become a "visitor" of other states. I'll have a mail box in Texas and possibly a very cheap "flop" for when we come back to Houston.

How do you get a physical address without living in Texas? PO Box type of address?

[REWahoo]

Quote:

Originally Posted by DallasFH How do you get a physical address without living in Texas? PO Box type of address?

This Texas based RV club specializes in it. www.escapees.com

[73ss454]

Yup, Florida has no income tax but they make up for it with property taxes.

[FinanceDude]

Maybe this will help clarify:

http://www.revenue.wi.gov/taxpro/news/080402.html

[MichaelB]

Quote:

Florida has some personal property taxes that may get you if you become a Florida resident.

Florida abolished the intangible asset tax - now only property tax and sales tax.

[mn54]

Quote:

Originally Posted by 2B Florida has some personal property taxes that may get you if you become a Florida resident. If your goal is to be a resident of a tax friendly state, consider Texas. There is no income tax or personal property tax although the state has an oppressive property tax. I'm planning on eliminating my home ownership in the state and become a "visitor" of other states. I'll have a mail box in Texas and possibly a very cheap "flop" for when we come back to Houston.

It's my understanding you have to be able to verify that you lived in the state for 6 months to claim residency.

[2B]

Quote:

Originally Posted by mn54 It's my understanding you have to be able to verify that you lived in the state for 6 months to claim residency.

Personally, I've lived here for over 20 years. If a newcomer shows up and rents an apartment, they have to have a Texas drivers license within 30 days unless they can prove residency somewhere else. Get the Texas drivers license and you're a resident. Once you've done that, the other state has to prove you are really a resident there. It's a big difference and makes you pretty safe unless you are highly visible.

If I become a "wanderer," I can get my mail sent to either a child or a "mail drop." Some mail drops have street addresses. An earlier post has a link for some of the many RV-ers that "live" in Texas while going all around the world.

[audreyh1]

Quote:

Originally Posted by mn54 It's my understanding you have to be able to verify that you lived in the state for 6 months to claim residency.

Which state? Florida? Not true for TX

Audrey

[LOL!]

I would hardly call the property taxes in TX "oppressive" since home prices in the Houston area are dirt cheap and don't keep up with inflation.

[2B]

Quote:

Originally Posted by LOL! I would hardly call the property taxes in TX "oppressive" since home prices in the Houston area are dirt cheap and don't keep up with inflation.

I'll be paying over $7,000 for a $240K house. If I moved to Missouri, I wouldn't pay anywhere near that even if I paid state income tax and property tax on a similar property. Since I plan to not pay state income tax soon, it will be even cheaper.

[Alan]

Quote:

Originally Posted by REWahoo 2B has it all figured out: Texas is a great place to retire - as long as you don't live there.

Ditto, we'll be moving back in 19 months, using it as a base.

[audreyh1]

Since we were already TX residents, we decided to remain so after we retired. It seemed best tax-wise to us anyway. In all my figuring, state income tax on our investment income would dwarf any property taxes we were paying which was around $4K.

Now, of course, living on wheels, we pay no property taxes. Just like 2Bs idea.

We do spend at least 3 months of the year in TX. We prefer the winters there, and we have family there.

Audrey