Anyone live in two states?

[farmerEd]

Hi guys....

I am curious how many of you, if any, own more than one house, one of which is not in the same state?

I am considering buying a second, very modest, home in Maine (I live in mass now). I've always wanted a little getaway place on or near the water, BUT the real motivation is health insurance...and here is the very quick scoop on my thinking....

In mass, there are no high deductible or cheap health insurance policies you can buy...the very cheapest I could find for my family of 6 is $701 per month, and that is with a lot of out of pocket expenses....

In Maine, if I was a "resident", I could get a $15K deductible BC/BS policy for $187 per month...a savings of $514 per month or over $6K per year.

To be considered a resident for Maine for health insurance purposes, I need only to have a residence (rented or owned), plus two or more of the following: a maine drivers license, be a filer maine state income taxes and/or be registered to vote in Maine....I could buy a house for $100K and have a mortgage payment that would just about cost me the $514 a month in savings from BC/BS...(and I could get a maine DL and register to vote pretty easily) but I wonder what the other implications are? i.e. do I become liable for maine income taxes if all my income is earned in mass? Would car insurance be affected etc?

Besides comments on my "plan", I wonder how those of you that live in more than one place handle all the legal implications of residing in two places and wonder if there are other issues that make this not a good idea from the insurance aspect.

PS: I did check with BC/BS of maine, and they don't care where you get the care, any BC/BS doctor is OK, so I could keep all the same doctors down here...

Thanks.

 

[John Galt]

We have 2 homes now, one in Illinois and one in Texas.
Actually, both are owned through a small holding company but I own the company, so..................

Taxes and health insurance were both big issues back when I was working toward ER. Texas was attractive
partly due to no state income tax. Both issues are
somewhat unimportant now. My taxable income is so low that the lack of state income tax is no big advantage, and our health insurance is easily portable from state to state. It is interesting that I spent so much time on these problems only to have them turn
into non-issues. We do plan to become Texas
residents in the future, but for reasons other than
taxes and health insurance.

John Galt

 

[Martha]

One warning I want make is that you could have two states claiming you are a resident and wanting you to pay income taxes in each state. I had a client once who had homes in Minnesota and Wisconsin. He tried to get some advantages of Wisconsin residency by having a resident fishing permit, a drivers license, and licensed some vehicles there. He really lived in Minnesota and paid Minnesota income taxes. Wisconsin assessed him for Wisconsin income taxes since he claimed on a variety of forms to be a Wisconsin resident.

So, be careful what you do, there may be unintended consequences.

Martha

 

[cute fuzzy bunny]

As a former new englander who had the same idea (with new hampster instead of maine)...

MA will require you to pay income taxes whether you live in MA and work in another state, or vice versa. Maine will require you to pay income tax if you're a resident. There may be ways to "allocate" taxes between the states, but MA really doesnt want to give up a penny. Legally, you're a resident of whichever state you spend the most time "residing" in, so you would be a resident of MA in this scenario. Getting caught isnt real likely, but if you did, there would be some legal and financial implications.

I had to dual file in MA and CA 11 years ago. That was fun.

 

[John Galt]

I agree the odds of "getting caught" are slim and none.
If it was me though, I would try to make sure I covered
as many bases as I could think of, just in case I was
challenged. In fact, this is good policy when dealing
with any "tax issue" which has grey areas. It's a long list folks.

John Galt

 

[Adventuregirl]

Hi there! Just my two cents worth....
Last week my boss was talking about a similar situation with CT and ME. He has a home in CT and one in ME. He and his wife got drivers liscences in ME and I believe they registered a vehicle there. After these transactions, ME recognised them as residents and hit them with a whole slew of taxes (he hired a lawyer and got it reduced to $14,000. I don't know what the original tax bill was)...appearently ME taxes are quite high. His wife was here in CT with him that day redoing their liscences and registrations. It is cheaper for them to be residents of CT than in ME.
Wish I had more specific details for you, but the upshot is that doing some sleuthing into the tax situation in ME would probably be a good idea...

-Adventuregirl

 

[cute fuzzy bunny]

I almost forgot...

Where I live is near the border of CA and NV. A bunch of folks bought summer places up near lake tahoe in NV, changed their drivers licenses and registrations to NV to avoid paying CA car taxes. The CHP was charged last year with regularly stopping, warning and generally harassing any vehicles in CA with NV plates that "looked like" they were locals.

Not sure how well that worked, but when I was in CA with MA plates still on my car, I got stopped three times in a month by the CHP, who had some lame excuse for the stop, who grilled me in detail on how long I had been in CA, where I lived, where I worked, and admonished me that I should get a license and CA registration before they "saw me again on the road".

Ugh.

 

[unclemick]

As long ago as the 60's - the police would sit outside Boeing parking lots and wait for out of state plates to drive out.

Down here(LA) - Mississippi plates are common - no hassle. But if I remember state taxes Were a hassle since LA - MS home/work split could go either way.

 

[BUM]

As RE beckons this issue of 2 homes in different states is "really hitting homes". We have a place in NY and NC. Most important things tend to be cheaper in NC especially health insurance. NY is downright hostile when it comes to individuals seeking coverage; not so in NC.

But as Martha points out the devil is in the details. I've got alot of homeswork yet to do.


BUM

 

[John Galt]

Well, I repeat (surprise surprise )

I have had this situation 3 different times in my life.
Unless I thought the situation was short term, or the
advantages not worth the trouble, I picked the most
"friendly" state and then transferred everything reasonably possible, car registration, voter registration,
insurance, mailing address, banking, etc. Everything I could think of to buttress my position if challenged
as long as it didn't turn my life upside down in the process.

John Galt

 

[BUM]

I'm going batty with NY/NC issues. Down deep in the details, its really not that different. The one BIG stick out is health insurance. In NY you need to be wealthy or broke to receive individual coverage. If you are not part of a group fugettaboutit. I may be better off keeping my biz open to keep the overpriced coverage I already have. :-/

But living in 2 or more states is interesting... All together now...How can you be in two places at once when you're not anywhere at aaaaaaaaaall?

BUM

 

[John Galt]

Hey BUM! I feel your pain man. My PHC is based in Michigan. We currently live in Illinois on our way to
"Margaritaville" (we hope). I once considered buying a
residence in Michigan and reestablishing residency there
so that my corp. could buy health insurance for me and my wife. The other catch is that we would both have to be employees (currently the corp. pays no wages)
and draw salaries. It would have been a desperate
solution, but I came close to doing it before we found affordable
coverage. Of course, if you didn't have a business, you
could start or buy one (an inactive shell?) It's a lot of bother and expense but you might save enough to pay for
it.

JG

 

[BUM]

JG,

Diclaimer this is a CHP (cocktail hour post).

Lets say your business is the group consisting of you and spouse. It is a group of 2 Galts, there are several considerations. Here are a few...

1.The insurance might ask for copies of recent pay stubs to verify that you are really employed by their definition. So now there is the expense of payroll taxes, perhaps a more complicated tax return, requiring a CPA.
2. Often its cheaper to enroll as 2 singles rather than a family. Family coverage implies care for children and possible pregnancies. Except for Immaculate Conception, we don't need that coverage. However chances are that your insurer has some fine print somewhere that says if the group of 2 is married then you must enroll as a family.
3. This thread is all about living in 2 states. So factor in that you might need other than emergency care in the other state. Now the rates can soar.
4. If you fudge the application you run the risk of being denied coverage.

If I don't get this figured out soon I may need a doctor or psych.

Perhaps Martha_M will weigh in on this.

BUM

 

[John Galt]

Hi BUM.........I am well aware of the pitfalls involved,
which is one of the main reasons I don't do it.
It's an option I want to avoid, but still an option.

JG

 

[retire@40]

MA will require you to pay income taxes whether you live in MA and work in another state, or vice versa.  Maine will require you to pay income tax if you're a resident.  There may be ways to "allocate" taxes between the states, but MA really doesnt want to give up a penny.  Legally, you're a resident of whichever state you spend the most time "residing" in, so you would be a resident of MA in this scenario.  Getting caught isnt real likely, but if you did, there would be some legal and financial implications.

Why make it more complicated than it needs to be? Don't states grant tax credits for taxes paid to other states so you don't get double taxed on the same income?

Who said you are a resident of the state you reside the most in? Can't you be a part-year resident in one state and a part-year resident of another state?

Why do you have to worry about "getting caught" if you just follow the law?

A simple answer to all this is just to bring your tax info to a CPA with experience in filing dual-state tax returns instead of trying to guess what to do.

 

[Patrick]

Here's an interesting article on "domicile:"

http://www.escapees.com/freebooklets.asp

 

[Patrick]

On above post, forgot to add "click on How to Become a Real Texan."

 

[Janie]

I agree with retire@40... it doesn't have to be that complicated if you follow the rules. Until last year, husband worked in Louisiana/ me in Texas/ we live in Texas. No income tax in Tx, and we just paid income tax on my husband's income, not mine.

I've moved a half-dozen times over the years between states, and it was pretty simple to file part-year resident tax forms for 2 states during those years.

I don't know what type of health plans you are looking at, but I would be cautious about buying health insurance in a state I didn;t live in. Does the plan allow you to use providers in both states?

 

[BUM]

Janie,

Most state insurance laws mandate that your carrier cover you in other states in emergencies.

Translation: A trip to the ER is covered but its expected that if you get sick you go home for treatment.

My agent says BCBS "the blues" is large enough to provide coverage in many states. However, now that we've switched, DW read the policy and she says we are only covered in NY not NC. Now I've got to figure that out

 

[Mr._johngalt]

I have lived in 2 states before and probably will
again at some point. I am sure this raises a whole
collection of issues, even beyond health insurance issues; but.....................actually read an insurance policy?
I don't think I have ever done that in my life and
don't plan to start.

Hey, come to think about it, I have had medical treatment in 4 different states since we got our current
insurance. No problem with the claims, so I guess that is a problem
we do not have to worry about. BTW, I agree about
BC/BS. When I had them I always felt I could go about anywhere and be covered.

JG