Save Money – Move to Nevada!

28/08/14 8:00 am | Comments (1) | Posted By:

California has always been notorious for their high cost of living combined with high income taxes. These tax rates are as high as 13.3% for high earners with income over $1,000,000. And to make matters worse, in 2012 California took the precedence of retroactively raising rates at the beginning of 2012 for a law that passed on November 6, 2012. Running numbers, an average household earning $100,000 in California, would pay close to $7,000 in taxes to the State.

The good news is that it is easy to just hop over the border, move to Nevada, and save the $7,000. This is especially true for a retiree with no job holding them down. Your $100,000 income would also go a lot further in Nevada than California!

So how would you go about moving to Nevada to not have to pay California’s onerous tax? This is easy if you own no property in California and retire in Nevada. You just sell your house and move your life to the Silver State. However, you might want to keep your home in California, which makes things more complicated as the Golden State does not want to forego any of their tax revenue (but remember, any income sourced in California will always be subject to their tax).

So what to do? First, spend less than nine months in California every year as California presumes you’re a resident of their State if you spend more than nine months there. Second, if you own a home outside of California and your presence in California is less than 6 months you are not considered a resident if you can prove that your activity is just as a guest. Further, there are additional factors that California considers in the instance that you are audited. These primary factors include:

  • the size of the homes in California compared to Nevada
  • where your personal property is located
  • family connections
  • and active business involvement.

Secondary factors, which are easy to conform to, include having a CPA and attorney in Nevada, registering your vehicles in Nevada, getting a Nevada driver’s license, and where you spend your money as California could request to look at your credit card statements.

Moving to Nevada can be a huge leap, but one that keeps more money in the bank to protect your wealth or have a more meaningful life as a retiree.

 

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1 Comment »

  • Sky Simone April 5, 2016

    Excellent points! I’ve just moved from Australia to California and we are looking at living in Nevada as the clean air and space as well as housing makes it appealing.

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