Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Crash Edition - 26th Mar 19
Handy Ways to Boost Your Home Income - 26th Mar 19
US Treasury Bond Yield Inversion and Political Fed Cycles - 26th Mar 19
Golan Heights Oil all about the Shekels - 26th Mar 19
Falling Yields a Catalyst for The Gold Catalyst - 26th Mar 19
Can We Lock Up Rachel Maddow Now? - 25th Mar 19
Real US National Debt Might Be $230 Trillion - 25th Mar 19
Friday's Stock Market Sell-Off - New Downtrend or Just Correction? - 25th Mar 19
20 Days Left to Find Buying Opportunities In Gold - 25th Mar 19
Will the Historic Imbalance in Gold Stocks to Gold Price Resolve ? - 25th Mar 19
EasySMX Wireless Games Controllers Review - 25th Mar 19
Stock Market Short-term Top - 25th Mar 19
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

An Often Overlooked Predator: State Governments and Income Taxes

Politics / Taxes Jan 30, 2015 - 03:02 PM GMT

By: Casey_Research

Politics

Nick Giambruno writes: International Man is all about making the most of your personal freedom and financial opportunity around the world. To do this, by definition, you must minimize the amount of money any government takes from you.

Unlike every other country in the world, the US successfully taxes its nonresident citizens on their global income. This means Americans living abroad have to not only deal with the tax system in the foreign country in which they live, but also with the multiple layers of tax bureaucracy from the US. It’s a uniquely American burden.


The layer that is often overlooked by US citizens abroad is state governments and state income taxes. Depending on which state claims you as its milking cow, the consequences could be substantial.

Some states are downright vicious and relentless when it comes to shaking down anyone with the smallest link to their territory. California, for example, has the highest state income tax at 13.3% and is notorious for being ultra-aggressive in its collection efforts.

State Income Taxes

It would be a grave mistake to assume that just because you’ve moved abroad, you don’t have any state income tax requirements. Proper planning must be made and precautions taken.

The main issue at hand here is intent.

Generally speaking, in order to be off the hook from state income taxes, you have to leave your state and become a genuine tax resident of another jurisdiction with no intention to return to your former state.

It’s up to you to prove—to the state government’s satisfaction—that you left and have no intention of returning. If you cannot do that, don’t be surprised if your state government pursues you.

For example, suppose you’re a resident of California and take on a project in Dubai as a temporary contractor. Since the project is only temporary, you clearly have an intent to return to California when it’s over, which probably makes the income you earn in Dubai taxable by California.

The rules and regulations naturally vary by state. Some states don’t even have an income tax and are no problem; others—like California—are an expensive nightmare.

Let’s start with the most favorable states.

The Best States

Some states make going abroad and eliminating state income tax easy—because they don’t have a state income tax in the first place.

If you’re a resident of the following states, you will have no state income tax (and associated complex forms) to worry about when you move abroad:

  1. Alaska
  1. Washington
  1. Nevada
  1. Wyoming
  1. South Dakota
  1. Texas
  1. Florida

The next-best states are Tennessee and New Hampshire, which only tax interest and dividends.

If you’re a resident of one of these seven states, consider yourself lucky: you will have no state income tax burden to worry about when you leave.

The Worst States

The four states that make life most difficult for American expats are:

  1. California
  1. New Mexico
  1. South Carolina
  1. Virginia

If you moved from one of these four states, you’ll likely still have a state income tax obligation—unless you’ve taken proactive measures.

In order to escape the tenacious grip of these states, you must sever all ties, which includes (but not limited to):

  • Renting—or better, selling—any real estate left behind
  • Changing your voter registration and driver’s license to a new state
  • Ending all of your memberships and/or associations in the state
  • Closing all bank and other accounts in the state
  • Moving any children or dependents out of the state
  • Making sure you have no telephone, utility, or other bills in the state.

For many people, the most practical solution to ending their relationship with these four nasty states is to establish genuine residency in one of the seven friendlier states mentioned above before moving abroad. This generally means spending at least six months in one of the more favorable states and establishing ties like a driver’s license, voter registration, community and professional memberships, financial accounts, and so forth in the new state.

For those who live in the 37 other states (not the seven favorable ones, New Hampshire, Tennessee, or the four worst states), you generally have to spend at least six months outside of the state to be considered a nonresident for tax purposes. The 37 other states are also generally not as picky as the four worst states when it comes to claiming residual ties to the state create a justification for tax residency—as long as you spend at least six months outside the state.

The Best Solution of All—America’s Tax Free Zone

Getting rid of your state income tax obligations is great, but it also fails to address the federal income tax, which is really the big enchilada. And there are only three ways to get rid of it.

  1. Death
  1. Renounce your US citizenship
  1. America’s Tax Free Zone

There’s an incredible solution to eliminating not only state income taxes but federal income taxes as well—one that doesn’t require you to give up your US citizenship or even leave the US. It’s like obtaining the tax benefits of renunciation without actually having to do so.

That solution has been dubbed “America’s Tax-Free Zone.”

If you can move from one state to another, you can just as easily move to America’s Tax-Free Zone to obtain substantially more benefits.

I know it sounds too good to be true, but I assure you it’s most certainly not. It’s 100% real and legal.

Peter Schiff, a best-selling author, financial commentator, and business owner, has already moved one of his businesses to America’s Tax-Free Zone and plans to move there personally sometime in the future.

But it’s not just Peter Schiff: many regular people of average means—business owners, individual investors, and entrepreneurs—are legally eliminating most taxes thanks to America’s Tax-Free Zone. And it’s no surprise that their numbers are constantly growing.

This amazing opportunity is exactly why we’ve teamed up with Peter to create a free video that explains it all.

If you’d like to see what it’s all about and how you can reclaim your freedom, you need to see this video by clicking here.

 
The article was originally published at internationalman.com.
Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules