Getting Residence In Another State to Pay Less Taxes?

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waltman300
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Getting Residence In Another State to Pay Less Taxes?

Post by waltman300 »

Okay first off, I'm from a state where taxes are very high. I also am outside the US majority of the year as well. So I'm not in the US much at all.
My living expenses outside the US is very cheap... because the country im in... cost of living is pretty low. I work online and barely make enough to cover my living expenses. So that should give you a picture of my financial situation which is very bad. I don't even want to mention how much i make a year as that is really low but it's enough to pay my expenses outside the US but barely.



Now what I want to know is this. How does one get residence in a tax friendly state? Such as what are the requirements? Example if i wanted to move to Nevada for example... i been there before a while back but only for short stays etc. Im from the east coast if that matters. I do know if i earn income in the US... well because of state taxes, its a good portion of the income. But people who earn income in say nevada or florida, do not have to pay state tax.



Now i have an apartment outside the US that i rent... been here for few years... i just go back to the US few times and then come back etc. Here we pay cash to rent, that's the preferred way of paying here. My US address on file is with my family's house so that is the mailing address I use for banking and anything i want sent to the us or buying things on amazon etc.



Now if i wanted to pay less taxes if i go back to the US for example... the one place i would like to move to would be Nevada. Now the first requirement would obviously be... you have to get a nevada ID... and give up your east coast state ID right? Now the other thing is this. What if you can't rent a regular apartment like how most people do and say rent a room in someone's house and pay them cash or say rent one of those extended stay places and stay there for months etc. Does that count? The other thing is... i got to assume... you have to reside in the state of nevada at least half the year or something like that if you want to file taxes under a nevada tax return form as oppose to an east coast tax return form right?



Now would it be possible to also be a resident of no state income state... but also be outside the US majority of the year? Obviously if you are a current resident of a no state income state... well that is easy to do... you could be outside the US in a few countries and travel with no issue and when you file taxes, well you would file under your nevada or florida tax return. But what if its someone who is from a high tax state and want to do this? I mean let say you rent a room from someone for 600 dollars a month in nevada or florida for example, that would work?



But the thing is what happens if say 6 months later, you no longer rent from anymore and move out back to the east coast. But still have a nevada id? But you no longer go back to nevada... say you are in the east coast state all year? What if you are outside the US pretty much all year and return to the east coast few weeks a year only? Could you for years down the line file as a nevada resident or is that not allowed? Example you go back to the US and go and live in nevada and get a nevada ID. Stay in nevada for 6 months. Then go back outside the US for most of the year. Then only come back to the east coast a few weeks an entire year and go back outside the US for most of year and vice versa. Would you have to change your tax return back to the east coast state since you haven't went back to nevada?
fallingeggs
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by fallingeggs »

Best way to avoid paying tax is to make no money, which is seems like your doing well enough!

In a bit more seriousness, states generally tax you when you move there. Getting an ID, renting a place, having bills to the address will support this. If you move out of the US, you won't be resident of any state. For example, a few years ago I moved from New York City to out of the US. I filed a return for the partial year I was in NYC, but haven't had to do anything else since.
7eight9
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by 7eight9 »

Re Nevada:

NRS 10.155  Legal residence.  Unless otherwise provided by specific statute, the legal residence of a person with reference to the person’s right of naturalization, right to maintain or defend any suit at law or in equity, or any other right dependent on residence, is that place where the person has been physically present within the State or county, as the case may be, during all of the period for which residence is claimed by the person. Should any person absent himself or herself from the jurisdiction of his or her residence with the intention in good faith to return without delay and continue his or her residence, the time of such absence is not considered in determining the fact of residence.

[Part 1:158:1911; RL § 3609; NCL § 6405] — (NRS A 1981, 1861) — (Substituted in revision for NRS 10.020)

https://www.leg.state.nv.us/NRS/NRS-010 ... S010Sec155
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Watty
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by Watty »

waltman300 wrote: Tue Feb 02, 2021 8:15 pm I'm from a state where taxes are very high. I also am outside the US majority of the year as well. So I'm not in the US much at all.
My living expenses outside the US is very cheap... because the country im in... cost of living is pretty low. I work online and barely make enough to cover my living expenses. So that should give you a picture of my financial situation which is very bad. I don't even want to mention how much i make a year as that is really low but it's enough to pay my expenses outside the US but barely.
Are you sure you are figuring out your state taxes right? If your income is so low that you can barely afford your living expenses in a low cost of living country then I would think that your state taxes would also be very low.

For such a low paying job it would also be very difficult to justify flying back and forth to the US several times a year.

Even if you could avoid the state taxes somehow it still sounds like you would be in a precarious position. I suspect that the best long term solution would be to find a job with a different employer where you could earn a better living wage, either in the US or in your home country.
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waltman300
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by waltman300 »

fallingeggs wrote: Tue Feb 02, 2021 8:26 pm Best way to avoid paying tax is to make no money, which is seems like your doing well enough!

In a bit more seriousness, states generally tax you when you move there. Getting an ID, renting a place, having bills to the address will support this. If you move out of the US, you won't be resident of any state. For example, a few years ago I moved from New York City to out of the US. I filed a return for the partial year I was in NYC, but haven't had to do anything else since.

So you are saying even if you rent a room from someone in nevada and pay them say 600 dollars for rent... then you go to the nevada dmv and get a nevada id... then you are set as a nevada resident? But how does the timetable work? Example, if you move to nevada in say january, well when you file taxes for last year, it would obviously still be the east coast state you were in right?


Well im out of the US majority of the year... but i technically haven't moved because where im located, im not a resident. Like imagine someone traveling abroad all year outside the us... but im basically in one or two country only during the entire time that is not the us... does that make sense?


My taxes when i file them with my accountant, they still have me as an east coast resident but does put my foreign non us address there though.


But if you move to nevada and get the nevada id... then say go outside the US for a while. Then you finally decide to go back to the US for half a year and say other half a year outside the US.


Then i assume by then, you are not allowed to file a nevada tax return right assuming you don't even go back there? Like could you still be living in an east coast city but just file nevada tax return? I can't imagine that is allowed right? Again, this is the assumption that when working... its all online work. Like imagine a freelancer so to speak.
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MP123
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by MP123 »

waltman300 wrote: Tue Feb 02, 2021 9:27 pm Then i assume by then, you are not allowed to file a nevada tax return right assuming you don't even go back there? Like could you still be living in an east coast city but just file nevada tax return? I can't imagine that is allowed right? Again, this is the assumption that when working... its all online work. Like imagine a freelancer so to speak.
There are no Nevada tax returns for individuals because there's no state income tax in Nevada. But you'd still owe Federal tax which is a much larger amount generally, and you'd owe that no matter what state you were in.

But yes, if you established domicile in NV and had no relationship with your former state at all then you would no longer need to pay taxes there even if you're traveling internationally most of the year. You'd still owe federal tax.
SrGrumpy
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by SrGrumpy »

waltman300 wrote: Tue Feb 02, 2021 8:15 pmI work online and barely make enough to cover my living expenses. So that should give you a picture of my financial situation which is very bad.
Are you sure you need to bother changing domicile? I'm a low earner in a high-tax state and can't remember the last time I had to write them a check. What does your accountant say? Renting a room for $600 a month in Nevada seems extravagant in your situation. It would be in mine.
seawolf21
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

Seems like if you live outside of US most of the year then you should be losing your prior state’s domicile due to establishing foreign country as new tax domicile. You shouldn’t have to pay any state tax just federal tax.
Afty
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by Afty »

What state is your current residence?
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by grabiner »

seawolf21 wrote: Tue Feb 02, 2021 9:57 pm Seems like if you live outside of US most of the year then you should be losing your prior state’s domicile due to establishing foreign country as new tax domicile. You shouldn’t have to pay any state tax just federal tax.
This depends on whether your former state recognizes the foreign country as your domicile. In particular, that depends on the nature of your visa; if you do not have permission to live permanently in the foreign country, you cannot have that as your domicile (permanent home). You may change your domicile to another state, but you will have to convince your former state that you intend to live in that state permanently.

Some states exempt people who are outside the country for long enough, even if their domicile is still in the state.
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30west
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by 30west »

You may want to closely review your state tax situation. I live in a high tax state, but for people of low income, there are many tax breaks and programs like property tax rebates (even for renters) that might benefit you more than you realize. Same with state subsidised heathcare. Low tax states usually dont offer much because there's no money for it.
7eight9
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by 7eight9 »

You might want to look into South Dakota.

RESIDENCY AFFIDAVIT FOR SOUTH DAKOTA RESIDENTS WHO TRAVEL AND DO NOT HAVE A RESIDENCE IN ANOTHER STATE
https://dps.sd.gov/application/files/49 ... it2019.pdf
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by goos_news »

Do you have family in another state with tax friendly statutes? Not just tax free, but those with high enough thresholds that it won't matter to you?

What some people do is that they move to a target state for a short period of time, transfer all bank/brokerage accounts, cut ties to the former state (like real estate) and get a driver's license. Then they move overseas. Florida and Nevada are popular for this.

I belong to some expat forums and these things are discussed all the time. For me, I have a family address in WA state that would suffice. But there are other concerns like estate taxes in that particular state.
seawolf21
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

grabiner wrote: Tue Feb 02, 2021 11:53 pm
seawolf21 wrote: Tue Feb 02, 2021 9:57 pm Seems like if you live outside of US most of the year then you should be losing your prior state’s domicile due to establishing foreign country as new tax domicile. You shouldn’t have to pay any state tax just federal tax.
This depends on whether your former state recognizes the foreign country as your domicile. In particular, that depends on the nature of your visa; if you do not have permission to live permanently in the foreign country, you cannot have that as your domicile (permanent home). You may change your domicile to another state, but you will have to convince your former state that you intend to live in that state permanently.

Some states exempt people who are outside the country for long enough, even if their domicile is still in the state.
Makes sense. This would seem like the way to proceed first before deciding to go rent a place in NV or another state.
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waltman300
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by waltman300 »

Im from New York City. But i haven't lived there in years. And by that i mean im not in New York City over 80% of the year at least. I only go there just few times a year but only a short time and then leave the US. Also throughout all these years, few years I qualified for that foreign income exclusion because of how many days im outside the US. So because of that, i paid less taxes than i normally do had i earn my small income in New York City. But the main thing here is I made very little income.



But of course i wouldn't be able to do this in New York City since well what i earn... wouldn't be enough to even rent a room. So I would have to stay with family if I had to move back to New York City now since I can't afford the rent.



But I was curious how this would work if say I was able to be a Nevada Resident and not have to pay state taxes. Again, the income i make is very low... its basically at the lower end of the poverty level so that should give you all a clue at what I make while working online. So renting a room in vegas for say 600 dollars a month... that would be doable but just barely... so you all probably know how much i make around. And if i don't cover those expenses, i still have savings in my bank account to cover that.



But yea I was just curious in the near future if i were to move to vegas and rent a room there, but then go back to New York City, i still have to pay NYS taxes right assuming i don't go to nevada anymore? Or its like well if you no longer go there anymore and rarely go overseas, then you have to change your state id/license back to NYS?


I know when you are over the amount of days outside the US, a lot of income is excluded but state taxes, you still have to pay. Thus federal is excluded. I mean i wouldn't bother with changing my state ID now since im still abroad. But i meant would it be possible to do this when I do go back to the US permanently. I mean, it would make zero sense for me to say go to nevada and get a nevada id there... then go back abroad... makes no sense to me since going back and forth flying cost a lot of money... for me at least if you know what i mean.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by palanzo »

If you establish residency in NV or SD then you are no longer a resident of NY. You can do this over a period of a few weeks. You do not need to rent a place forever. Once you have your new residency you are free to live overseas and you would only need to pay Federal taxes or maybe not if your income is so low.

This has been discussed many times on BH so do a search to find other threads.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

waltman300 wrote: Sat Feb 20, 2021 10:04 pm Im from New York City. But i haven't lived there in years. And by that i mean im not in New York City over 80% of the year at least. I only go there just few times a year but only a short time and then leave the US. Also throughout all these years, few years I qualified for that foreign income exclusion because of how many days im outside the US. So because of that, i paid less taxes than i normally do had i earn my small income in New York City. But the main thing here is I made very little income.



But of course i wouldn't be able to do this in New York City since well what i earn... wouldn't be enough to even rent a room. So I would have to stay with family if I had to move back to New York City now since I can't afford the rent.



But I was curious how this would work if say I was able to be a Nevada Resident and not have to pay state taxes. Again, the income i make is very low... its basically at the lower end of the poverty level so that should give you all a clue at what I make while working online. So renting a room in vegas for say 600 dollars a month... that would be doable but just barely... so you all probably know how much i make around. And if i don't cover those expenses, i still have savings in my bank account to cover that.



But yea I was just curious in the near future if i were to move to vegas and rent a room there, but then go back to New York City, i still have to pay NYS taxes right assuming i don't go to nevada anymore? Or its like well if you no longer go there anymore and rarely go overseas, then you have to change your state id/license back to NYS?


I know when you are over the amount of days outside the US, a lot of income is excluded but state taxes, you still have to pay. Thus federal is excluded. I mean i wouldn't bother with changing my state ID now since im still abroad. But i meant would it be possible to do this when I do go back to the US permanently. I mean, it would make zero sense for me to say go to nevada and get a nevada id there... then go back abroad... makes no sense to me since going back and forth flying cost a lot of money... for me at least if you know what i mean.
What exactly are your plans? If you never plan on living in in NY again, then just stop filing. NY will question residency if you stop filing and then resume filing NY taxes in the future. That's when they may ask where were you during the missing years when you didn't you file a return.

You mentioned moving to East Coast after 6 months. So if it's not moving (back to) NY, then the prior paragraph applies as well.

Are you a citizen or have legal residence in a foreign country? If so, that helps establish that the foreign country is your domicile relieving you of NY tax obligations especially is you don't intend on returning to NY. You need to cut your ties to NY to lose the tax obligations. Getting IDs, job, having legal status in a foreign country is a strong indicator you no longer have ties to NY.

If you have plans to return to NY, that is when you ought to have your documents in order to prove you had no intention of returning to NY during the time you were absent but only returned due to change in circumstances.

It's really not that complicated for people who legitimately cut ties to NY, They have work/school/identification/mortgage/rent/library cards/grocery bills/utilities bills in another state..
Last edited by seawolf21 on Sat Feb 20, 2021 10:42 pm, edited 2 times in total.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by grabiner »

palanzo wrote: Sat Feb 20, 2021 10:15 pm If you establish residency in NV or SD then you are no longer a resident of NY. You can do this over a period of a few weeks. You do not need to rent a place forever. Once you have your new residency you are free to live overseas and you would only need to pay Federal taxes or maybe not if your income is so low.
You need to convince your former state that you actually had the intention to change your domicile (permanent home). Moving from State X to State Y for a month, then living in Country Z, suggests that State Y was never your domicile. It might remain State X, or it might be Country Z if your status there allows you to live there permanently.
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waltman300
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by waltman300 »

Well im still abroad now. I mean if i ever decide to just come back and live in the US again. But if i do this, it would be hard to live in NYC since i can't afford the rent there. But i could possibly rent a room in nevada for cheap if i do that... which is why i ask.


No, I'm not a citizen in another country and don't have residence abroad. So the reason why I travel back to the US and outside the US is because of those reasons. So thus when i have my taxes filed by my accountant well im still filing a NYS return etc.


Again i work online... and thus self employed. So like i wanted to know if in future if i do move back to the US permanently, would it be possible to rent a room in vegas and then get a nevada license/id. But say after living there for months and say i move back to NYC, if i stay with my family for some time there... my tax return would be a nevada tax return right? But if say i lived another year or so or even longer in NYC but with my family, wouldn't i need to have my ID and everything changed back to Nevada? Like imagine you leave nevada after staying there for months back to NYC. How long could you continue filing a nevada tax return until you can no longer if assuming after those months, you just stay in NYC? Again, i work online so where i work online... doesn't matter since its online.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by humblecoder »

Read this: https://www.tax.ny.gov/pit/file/pit_definitions.htm. In particular:

1, You were in a foreign country for at least 450 days during any period of 548 consecutive days; and
2. You, your spouse (unless legally separated), and minor children spent 90 days or less in New York State during this 548-day period; and
3. During the nonresident portion of the tax year in which the 548-day period begins, and during the nonresident portion of the tax year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the tax year bears to 548. The following formula illustrates this condition:
number of days in the nonresident portion x 90 = maximum number of days allowed in New York State
548


Based upon this, New York may consider you a non-resident. Thus you would only have to pay taxes on "New York sourced income". If you are working abroad so none of your income is from a New York source AND NY doesn't consider you a resident based upon the criteria in the link, then you shouldn't need to pay ANY New York income tax.

I would check with another accountant who perhaps has some experience with ex-pats to confirm. I am not an accountant, lawyer, or tax professional.

BTW, renting a room for $7200/year to avoid New York State income tax for somebody who says that are making a very low salary sounds like an insane idea. I would be shocked if, at your low income level, you'd be paying more than $7200 in state income taxes.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

waltman300 wrote: Sat Feb 20, 2021 10:43 pm Well im still abroad now. I mean if i ever decide to just come back and live in the US again. But if i do this, it would be hard to live in NYC since i can't afford the rent there. But i could possibly rent a room in nevada for cheap if i do that... which is why i ask.


No, I'm not a citizen in another country and don't have residence abroad. So the reason why I travel back to the US and outside the US is because of those reasons. So thus when i have my taxes filed by my accountant well im still filing a NYS return etc.


Again i work online... and thus self employed. So like i wanted to know if in future if i do move back to the US permanently, would it be possible to rent a room in vegas and then get a nevada license/id. But say after living there for months and say i move back to NYC, if i stay with my family for some time there... my tax return would be a nevada tax return right? But if say i lived another year or so or even longer in NYC but with my family, wouldn't i need to have my ID and everything changed back to Nevada? Like imagine you leave nevada after staying there for months back to NYC. How long could you continue filing a nevada tax return until you can no longer if assuming after those months, you just stay in NYC? Again, i work online so where i work online... doesn't matter since its online.
You are a NY resident "you maintain a permanent place of abode in New York State for substantially all of the taxable year and spend 184 days or more in New York State during the taxable year, whether or not you are domiciled in New York State for any portion of the taxable year. Note: Any part of a day is a day for this purpose."

You maintaining a permanent place of abode in NY even "if you do not own or lease the place where you live, you are considered to be maintaining it if you are making contributions to the household, in the form of money, services, or other contributions. "

https://www.tax.ny.gov/pubs_and_bulls/t ... _abode.htm

So if you are living with your family in NY, you are a NY resident unless you do not plan on making any contributions to the household monetary, groceries, or otherwise to the family.

As stated before, for most people, it's not complicated. They cut legitimately cut ties; they don't sleep while being in NY. They don't work in NY. They don't rely on NY 1st responders in the event of an emergency.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

humblecoder wrote: Sat Feb 20, 2021 11:02 pm Read this: https://www.tax.ny.gov/pit/file/pit_definitions.htm. In particular:

1, You were in a foreign country for at least 450 days during any period of 548 consecutive days; and
2. You, your spouse (unless legally separated), and minor children spent 90 days or less in New York State during this 548-day period; and
3. During the nonresident portion of the tax year in which the 548-day period begins, and during the nonresident portion of the tax year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the tax year bears to 548. The following formula illustrates this condition:
number of days in the nonresident portion x 90 = maximum number of days allowed in New York State
548


Based upon this, New York may consider you a non-resident. Thus you would only have to pay taxes on "New York sourced income". If you are working abroad so none of your income is from a New York source AND NY doesn't consider you a resident based upon the criteria in the link, then you shouldn't need to pay ANY New York income tax.

I would check with another accountant who perhaps has some experience with ex-pats to confirm. I am not an accountant, lawyer, or tax professional.

BTW, renting a room for $7200/year to avoid New York State income tax for somebody who says that are making a very low salary sounds like an insane idea. I would be shocked if, at your low income level, you'd be paying more than $7200 in state income taxes.
It's sounding like the plan is to rent a place for a couple of months elsewhere, claim change of domicile, move back to NY and live there long term to avoid taxes. Media had an article a couple of years back on the number of out of state plates in NYC streets outside of tourist areas.
palanzo
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by palanzo »

grabiner wrote: Sat Feb 20, 2021 10:39 pm
palanzo wrote: Sat Feb 20, 2021 10:15 pm If you establish residency in NV or SD then you are no longer a resident of NY. You can do this over a period of a few weeks. You do not need to rent a place forever. Once you have your new residency you are free to live overseas and you would only need to pay Federal taxes or maybe not if your income is so low.
You need to convince your former state that you actually had the intention to change your domicile (permanent home). Moving from State X to State Y for a month, then living in Country Z, suggests that State Y was never your domicile. It might remain State X, or it might be Country Z if your status there allows you to live there permanently.
If one files a final return in State X and resides in State Y for a few months, should that not be sufficient? Of course cutting all ties with X and establishing doctor, dentist, library card, ID etc in Y.
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by humblecoder »

seawolf21 wrote: Sat Feb 20, 2021 11:48 pm
humblecoder wrote: Sat Feb 20, 2021 11:02 pm Read this: https://www.tax.ny.gov/pit/file/pit_definitions.htm. In particular:

1, You were in a foreign country for at least 450 days during any period of 548 consecutive days; and
2. You, your spouse (unless legally separated), and minor children spent 90 days or less in New York State during this 548-day period; and
3. During the nonresident portion of the tax year in which the 548-day period begins, and during the nonresident portion of the tax year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the tax year bears to 548. The following formula illustrates this condition:
number of days in the nonresident portion x 90 = maximum number of days allowed in New York State
548


Based upon this, New York may consider you a non-resident. Thus you would only have to pay taxes on "New York sourced income". If you are working abroad so none of your income is from a New York source AND NY doesn't consider you a resident based upon the criteria in the link, then you shouldn't need to pay ANY New York income tax.

I would check with another accountant who perhaps has some experience with ex-pats to confirm. I am not an accountant, lawyer, or tax professional.

BTW, renting a room for $7200/year to avoid New York State income tax for somebody who says that are making a very low salary sounds like an insane idea. I would be shocked if, at your low income level, you'd be paying more than $7200 in state income taxes.
It's sounding like the plan is to rent a place for a couple of months elsewhere, claim change of domicile, move back to NY and live there long term to avoid taxes. Media had an article a couple of years back on the number of out of state plates in NYC streets outside of tourist areas.
If somebody maintains a place of abode in New York and spends 184 days or more in the state (which I assume somebody living there long term would be) then New York would consider them a resident regardless of what their domicile is. So if somebody were to do what you suggest and didn't pay New York State taxes, then that would be illegal based upon the way I am reading the article. Again, not a lawyer or tax professional.

However, that is not what the OP is trying to do. It sounds like he lives abroad but is still paying New York State taxes. He is thinking that if he establishes a domicile in Nevada, he can avoid said taxes. I am suggesting that, based upon the link to the New York State income tax web site, that he might not owe ANY NY state taxes and he doesn't have to go through with this charade.
Lexx
Posts: 376
Joined: Mon Dec 21, 2020 6:21 pm

Re: Getting Residence In Another State to Pay Less Taxes?

Post by Lexx »

There are folks who have sold their brick and mortar home and travel year round in a motorhome. Check out the Escapees RV forum. I think South Dakota is one of the popular places to declare residency as it is super easy. Check out this article:
https://www.escapees.com/establishing-d ... for-rvers/
seawolf21
Posts: 992
Joined: Tue Aug 05, 2014 7:33 am

Re: Getting Residence In Another State to Pay Less Taxes?

Post by seawolf21 »

humblecoder wrote: Sun Feb 21, 2021 12:00 am
seawolf21 wrote: Sat Feb 20, 2021 11:48 pm
humblecoder wrote: Sat Feb 20, 2021 11:02 pm Read this: https://www.tax.ny.gov/pit/file/pit_definitions.htm. In particular:

1, You were in a foreign country for at least 450 days during any period of 548 consecutive days; and
2. You, your spouse (unless legally separated), and minor children spent 90 days or less in New York State during this 548-day period; and
3. During the nonresident portion of the tax year in which the 548-day period begins, and during the nonresident portion of the tax year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the tax year bears to 548. The following formula illustrates this condition:
number of days in the nonresident portion x 90 = maximum number of days allowed in New York State
548


Based upon this, New York may consider you a non-resident. Thus you would only have to pay taxes on "New York sourced income". If you are working abroad so none of your income is from a New York source AND NY doesn't consider you a resident based upon the criteria in the link, then you shouldn't need to pay ANY New York income tax.

I would check with another accountant who perhaps has some experience with ex-pats to confirm. I am not an accountant, lawyer, or tax professional.

BTW, renting a room for $7200/year to avoid New York State income tax for somebody who says that are making a very low salary sounds like an insane idea. I would be shocked if, at your low income level, you'd be paying more than $7200 in state income taxes.
It's sounding like the plan is to rent a place for a couple of months elsewhere, claim change of domicile, move back to NY and live there long term to avoid taxes. Media had an article a couple of years back on the number of out of state plates in NYC streets outside of tourist areas.
If somebody maintains a place of abode in New York and spends 184 days or more in the state (which I assume somebody living there long term would be) then New York would consider them a resident regardless of what their domicile is. So if somebody were to do what you suggest and didn't pay New York State taxes, then that would be illegal based upon the way I am reading the article. Again, not a lawyer or tax professional.

However, that is not what the OP is trying to do. It sounds like he lives abroad but is still paying New York State taxes. He is thinking that if he establishes a domicile in Nevada, he can avoid said taxes. I am suggesting that, based upon the link to the New York State income tax web site, that he might not owe ANY NY state taxes and he doesn't have to go through with this charade.
I could have misread the last post form OP. Too many what if’s involving Nevada and moving back to NY.

What I got out of this:
OP stated previously can’t afford to live in NY but willing to consider renting a place in NV. I don’t think the intent is to keep renting in NV long term; just for shortest term possible.

OP also inquired about what if coming back to NY after an oversea stay to live with family would OP be able to keep NV residency if living in NY for a while but also what if living in NY for a year or longer.
humblecoder
Posts: 567
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by humblecoder »

seawolf21 wrote: Sun Feb 21, 2021 10:05 am
I could have misread the last post form OP. Too many what if’s involving Nevada and moving back to NY.

What I got out of this:
OP stated previously can’t afford to live in NY but willing to consider renting a place in NV. I don’t think the intent is to keep renting in NV long term; just for shortest term possible.

OP also inquired about what if coming back to NY after an oversea stay to live with family would OP be able to keep NV residency if living in NY for a while but also what if living in NY for a year or longer.
[/quote]

I re-read it and you could be right. Honestly, I tried re-reading it three times, and it hard to parse completely what it is that the OP wants to do.

OP if you are out there, if you re-phrase your post so that it is more to the point and less rambling, then you will get better answers!

Again, here is my layman analysis (not a lawyer or accountant).

1. If you move to NV and establish a domicile there (NV driver's license, etc), and then you move to NY and stay there "long term", NY may consider you a resident and you will have to NY state taxes, despite what it says on your driver's license. Anyone who does otherwise may be evading taxes. I know states like NY are very aggressive about going after snowbirds who live in both Florida and NY. You could have an out of state license, plates, home, etc. However, if you are living in NY for more than half the year, NY will demand their cut.

2. If you live overseas, you may not have to pay NY state taxes at all even if your last domicile and residence is in NY. Therefore, you don't have to go through the machinations of establishing residency in NV first just to avoid NY tax while living overseas.
humblecoder
Posts: 567
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by humblecoder »

seawolf21 wrote: Sun Feb 21, 2021 10:05 am
I could have misread the last post form OP. Too many what if’s involving Nevada and moving back to NY.

What I got out of this:
OP stated previously can’t afford to live in NY but willing to consider renting a place in NV. I don’t think the intent is to keep renting in NV long term; just for shortest term possible.

OP also inquired about what if coming back to NY after an oversea stay to live with family would OP be able to keep NV residency if living in NY for a while but also what if living in NY for a year or longer.
I re-read it and you could be right. Honestly, I tried re-reading it three times, and it hard to parse completely what it is that the OP wants to do.

OP if you are out there, if you re-phrase your post so that it is more to the point and less rambling, then you will get better answers!

Again, here is my layman analysis (not a lawyer or accountant).

1. If you move to NV and establish a domicile there (NV driver's license, etc), and then you move to NY and stay there "long term", NY may consider you a resident and you will have to NY state taxes, despite what it says on your driver's license. Anyone who does otherwise may be evading taxes. I know states like NY are very aggressive about going after snowbirds who live in both Florida and NY. You could have an out of state license, plates, home, etc. However, if you are living in NY for more than half the year, NY will demand their cut.

2. If you live overseas, you may not have to pay NY state taxes at all even if your last domicile and residence is in NY. Therefore, you don't have to go through the machinations of establishing residency in NV first just to avoid NY tax while living overseas.
[/quote]
wrongfunds
Posts: 2617
Joined: Tue Dec 21, 2010 3:55 pm

Re: Getting Residence In Another State to Pay Less Taxes?

Post by wrongfunds »

I wonder if OP's income is very little but only by NYC Wall Street standard? I mean he still has retained services of CPA and seems to be willing to waste $600 per month to NOT stay in Nevada.

I think the RV link provided by a poster would be the best place to start investigating. OP can't afford to throw $600 per month if his income is very little and can be compared to federal poverty level.
7eight9
Posts: 1855
Joined: Fri May 17, 2019 7:11 pm

Re: Getting Residence In Another State to Pay Less Taxes?

Post by 7eight9 »

waltman300 wrote: Sat Feb 20, 2021 10:43 pm Well im still abroad now. I mean if i ever decide to just come back and live in the US again. But if i do this, it would be hard to live in NYC since i can't afford the rent there. But i could possibly rent a room in nevada for cheap if i do that... which is why i ask.


No, I'm not a citizen in another country and don't have residence abroad. So the reason why I travel back to the US and outside the US is because of those reasons. So thus when i have my taxes filed by my accountant well im still filing a NYS return etc.


Again i work online... and thus self employed. So like i wanted to know if in future if i do move back to the US permanently, would it be possible to rent a room in vegas and then get a nevada license/id. But say after living there for months and say i move back to NYC, if i stay with my family for some time there... my tax return would be a nevada tax return right? But if say i lived another year or so or even longer in NYC but with my family, wouldn't i need to have my ID and everything changed back to Nevada? Like imagine you leave nevada after staying there for months back to NYC. How long could you continue filing a nevada tax return until you can no longer if assuming after those months, you just stay in NYC? Again, i work online so where i work online... doesn't matter since its online.
Residents of Nevada don't file a Nevada tax return.

As I suggested previously - look into South Dakota. Very easy (and inexpensive) to obtain residency.
I guess it all could be much worse. | They could be warming up my hearse.
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Fat-Tailed Contagion
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Re: Getting Residence In Another State to Pay Less Taxes?

Post by Fat-Tailed Contagion »

There is a movement to move away from these "High-Tax" states.

If you are on Facebook there are some very large groups of people helping each other with this refugee-type movement.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor (75/25 - 50/50 - 25/75)
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