Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-14-2021, 01:10 PM   #21
Full time employment: Posting here.
 
Join Date: Feb 2016
Location: SoCal
Posts: 904
http://www.wsj.com/articles/a-califo...em-11608331448
Mr. Tightwad is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-14-2021, 01:20 PM   #22
Full time employment: Posting here.
 
Join Date: Dec 2003
Posts: 572
Quote:
Originally Posted by Mr. Tightwad View Post
That bill died as far as I know.
https://tinyurl.com/y2oppyj4
Peter is offline   Reply With Quote
Old 01-14-2021, 01:21 PM   #23
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Chicagoland again!
Posts: 34,859
Quote:
Originally Posted by Mr. Tightwad View Post
A naked link with no explanation? Thanks. It’s an opinion piece, not a news source, and the bill in reference has been drafted but is not under active consideration by the Ca. legislature.

The other part of your post, about anyone spending 60 days in California being subject to state income tax, would also benefit from a link.
MichaelB is offline   Reply With Quote
Old 01-14-2021, 01:36 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 3,199
A few years ago I attended a lecture (mostly pitched at snowbirds) on declaring residency in FL.

They listed many things (like pb4uski cited in post #3 above) that "sticky" states will check to determine whether your claim of not being a "sticky" state resident is valid.

Another item that is often overlooked is a "sticky" state will pull your cell phone records during an audit to see which towers your cell phone has been pinging on during the year. This quickly reveals where you are actually spending your time.

omni
omni550 is offline   Reply With Quote
Old 01-14-2021, 01:39 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,506
Quote:
Originally Posted by Green Papaya View Post
Well, I have the opposite scenario.

If I do a Roth conversion, let's assume $120K, in February 2021 while living in TX. Then in October 2021 I move and establish residency in CA. Would I be on the hook for CA tax on 1) $120K income or 2) $30K (for the 3 months I will be a CA resident) or 3) $0 since the Roth conversion occurred before I become a CA resident? Anyone has a similar experience?
Option 3) $0. During the year that you move into the state you are taxed on income received while you are a California resident and on income received from California sources. A Roth conversion that occurs before you move into the state is not income from a California source.
cathy63 is offline   Reply With Quote
Old 01-14-2021, 01:47 PM   #26
Recycles dryer sheets
 
Join Date: Nov 2004
Location: SF Bay Area
Posts: 161
Great information so far. Thanks!

I think during the early part of retirement, I'll be able to keep my taxable income low but if things go well, when RMDs start my taxable income may be more significant.

OTOH, if real estate continues to skyrocket, my CA prop tax may be so low that moving to avoid income taxes makes little financial sense as whatever property I buy in FL may have significantly higher prop taxes. Lots to think about.
anothercog is offline   Reply With Quote
Old 01-14-2021, 02:09 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,506
Quote:
Originally Posted by MichaelB View Post
A naked link with no explanation? Thanks. Itís an opinion piece, not a news source, and the bill in reference has been drafted but is not under active consideration by the Ca. legislature.

The other part of your post, about anyone spending 60 days in California being subject to state income tax, would also benefit from a link.
The wealth tax bill that died before getting out of committee did plan to tax people with over $30M in assets who spent more than 60 days in CA. The .4% tax would only have applied to assets exceeding $30M and would have been pro-rated according to how long they were actually in the state. There is currently no tax on "anyone who stays in the state more than 60 days", and a quick Google search didn't turn up any proposals to implement one.

I suspect that Chuckanut's friends with the boat heard some incomplete and incorrect version of the wealth tax bill that made them think they shouldn't stay more than 60 days.

CA now has a budget surplus, so I suspect the idea of a wealth tax will remain dead for at least a few years.
cathy63 is offline   Reply With Quote
Old 01-14-2021, 02:16 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,730
Quote:
Originally Posted by Mr. Tightwad View Post
I'm not a tax expert like 2nd Cor and Cathy is, but there is a law that says if you spend 60 days in CA, whether its to visit, vacation, or if you are in a hospital, the reason doesn't matter, you pay CA state taxes.

We are also on the verge of getting wealth taxes and taxing those that leave the state (for 10 years).
If you are there 60 days or more and have earned income then you may have to file a non-resident tax return and pay tax...but only on the income that you earned in California during that 60 days, but not on SS or investment income earned during that time.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-14-2021, 02:17 PM   #29
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Chicagoland again!
Posts: 34,859
Quote:
Originally Posted by cathy63 View Post
The wealth tax bill that died before getting out of committee did plan to tax people with over $30M in assets who spent more than 60 days in CA. The .4% tax would only have applied to assets exceeding $30M and would have been pro-rated according to how long they were actually in the state. There is currently no tax on "anyone who stays in the state more than 60 days", and a quick Google search didn't turn up any proposals to implement one.

I suspect that Chuckanut's friends with the boat heard some incomplete and incorrect version of the wealth tax bill that made them think they shouldn't stay more than 60 days.

CA now has a budget surplus, so I suspect the idea of a wealth tax will remain dead for at least a few years.
Thanks for setting the record straight.
MichaelB is offline   Reply With Quote
Old 01-14-2021, 02:43 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,730
Quote:
Originally Posted by cathy63 View Post
Well, I know lots of people, some of them right here on this forum, who are "retired" but still earn money by consulting, doing handyman type jobs, selling handcrafted items, writing blogs or books or newspaper columns, etc. They may not think of it as working, but the state will still want their cut.
While I agree that if someone is docked in California for the requisite time and earning money as described above that they should file a non-resident tax return for that income, if they fail to, either deliberately or unknowing, I'm skeptical that the the FTB will chase them for it... I would think that they would have bigger fish to fry.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-14-2021, 02:49 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,730
Quote:
Originally Posted by Green Papaya View Post
Well, I have the opposite scenario.

If I do a Roth conversion, let's assume $120K, in February 2021 while living in TX. Then in October 2021 I move and establish residency in CA. Would I be on the hook for CA tax on 1) $120K income or 2) $30K (for the 3 months I will be a CA resident) or 3) $0 since the Roth conversion occurred before I become a CA resident? Anyone has a similar experience?
I'm not sure how it works in CA but in most states there is a form where one column is your total income (as if you were a resident) and a second column of your income for that state (VT for example). Then you divide the total of VT income by total income and apply that ratio to the tax as if you were a resident to get your VT tax. Since the Roth conversion occured during the time that you were a TX resident then it would not be VT income and would effectively not be taxed.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 01-14-2021, 05:53 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 12,452
IIRC, when I moved from CA to WA in the 80's, California taxed me only on the income I earned in California. But, to compute my tax bracket they used all of my income, including that earned in WA.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-14-2021, 06:53 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,730
That's typical... So if your total income was 100 and 10 was in California and the California tax based on 100 of income was 8, then your non-residential tax owed to CA would be 0.8... 10% of the 8.

And you usually get a tax credit from your state of domicile for the lesser of the tax you paid another state or the tax you would have paid in that state... so if the tax on the 100 of income in your resident state would have been 5, then you would get a credit of 0.5, but if the tax on 100 of income in you resident state would have been 10, then your tax credit would only be 0.8 that you paid to CA.

That's the concept anyway.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Part-Time ER vs Part-Time OMY: a Perspective 38Chevy454 Life after FIRE 29 05-29-2019 03:56 AM
HSA investments for Californians Human FIRE and Money 2 01-15-2018 10:30 PM
Tax rate for ex-Californians catotx FIRE and Money 53 03-26-2016 02:16 PM
Any Californians comment on Well's Fargo OldAgePensioner Other topics 44 06-10-2006 04:02 PM

» Quick Links

 
All times are GMT -6. The time now is 01:04 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.