Move out-of-state temporarily to save taxes

Forum|Forum|2 years ago
February 8, 2024
1 reply
0 views

My estimated taxable income may be over $200K for 2024 and 2025 due to the high tuition costs for my dependent child. If I move to Texas (no state income tax) later this year (2024), I hope this may save at 5% state income tax (California) since I will be in the high income bracket.

What is the rule to determine the residency for tax return purpose? Do I need to stay in Texas for more than 180 days? Does it have to be continuously? I may take some short trips between Texas and California.

How do I establish residency for tax return purposes? Will TurboTax ask me how many days I reside in a state?

For the past years, my wife and I have always filed jointly. If I move to Texas while my wife stays in California, may I still file our tax return jointly as a married couple? Or do we need to file separately even though she doesn’t have any income?

We own a house and for our property tax we received homeowner exemption. Do we still quality for this exemption since my wife remains in California?

AmyC

Employee

Your home is where you intend to live, have friends, drivers license, vote, insurance, all of those things that make a place home. If you have a house and wife in CA, it sounds like you will be a CA resident regardless of where you go.

Here is one good list from the Tax Book:

Registering to vote and voting in the new state.
Purchasing residential property
Titling and registering vehicles.
Paying state income tax.
Notifying the state of previous legal residence/domicile of the change in state of legal residence/domicile.
Preparing a last will and testament which indicates the new state of legal residence/domicile

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"