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Retirement planning and taxes

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  • Avatar wcinewbie 
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    Status: Physician
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    How do states determine/confirm residency for taxation purposes during retirement? What’s to prevent you from living the life at the beach in California while maintaining a home in Texas?

    #169087 Reply
    Avatar jacoavlu 
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    Status: Physician, Small Business Owner
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    Joined: 03/01/2018

    It kinda comes down to where do you really live. Where do you spend most of your time. If you have kids where do they go to school. Church membership. Voting. Registration of cars. Etc. What can you prove and defend in the event of an audit

    There are lots of resources on the internet to help learn about this.

    Here’s a short article.

    https://www.thetaxadviser.com/newsletters/2017/may/state-tax-issues-domicile.html

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #169089 Reply
    jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016

    How do states determine/confirm residency for taxation purposes during retirement? What’s to prevent you from living the life at the beach in California while maintaining a home in Texas?

    Click to expand…

    Some states are more…let’s say, intrusive, than others. NY comes to mind (as usual). @jacoavlu mentioned voting registration, church and other organizational membership, auto registration. These are attributes that would be reviewed in the event of an audit. For all practical purposes, you need to be physically present in the state of residency for 1/2 year + 1 day to prove residency although these other factors will serve to bolster your case. If that were not the case, I would not prepare and sign a return reporting you as a resident of that state but I don’t ask the other questions, not my business except to advise a client. Not too unusual to move and forget to change your auto registration in the first year, for example, but it could matter in event of audit.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #169098 Reply
    Avatar wcinewbie 
    Participant
    Status: Physician
    Posts: 59
    Joined: 09/30/2017

    How would you even end up on the radar of a new york tax auditor for example if you dont actually derive any income from there during retirement? No 1099, no w2s.

    #169104 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3354
    Joined: 01/14/2017

    Property ownership, auto registration, voter registration, and a bloodthirsty NY government that is now not seeing a nice revenue stream to support their overspending.

    #169109 Reply
    Avatar snowcanyon 
    Participant
    Status: Physician
    Posts: 486
    Joined: 10/22/2018

    One man’s saga trying to prove he doesn’t live in NYC (although still in NYS): https://www.newyorker.com/magazine/2012/03/19/tax-me-if-you-can

    #169111 Reply
    Liked by Tim
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 2627
    Joined: 09/18/2018

    “How do states determine/confirm residency for taxation purposes during retirement? “
    Taxpayer responsibility to “prove” where you were.

    “What’s to prevent you from living the life at the beach in California while maintaining a home in Texas?”
    Absolutely nothing!

    If your question compliance,
    https://www.ftb.ca.gov/individuals/fileRtn/index.shtml

    If your question is criminal defense, quietly seek legal advice at the beach!

    If you are convicted of tax evasion in California under Revenue and Taxation Code Section 19706, you face severe penalties including jail time and hefty fines. A conviction is punishable by up to one year in county jail or state prison. You could also be ordered to pay a fine of up to $20,000.

    I do believe $20,000 is very reasonable for the “all inclusive “ accommodations. Unfortunately, you might be considered a resident as well.

    #169124 Reply
    Liked by jfoxcpacfp
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3354
    Joined: 01/14/2017
    A conviction is punishable by up to one year in county jail or state prison.

    Click to expand…

    Have we found the FIRE solution to healthcare coverage?   😆

    #169207 Reply
    Liked by Tim
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2107
    Joined: 03/01/2018

    Thanks for sharing the New Yorker link, I enjoyed reading that

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #169219 Reply
    Liked by Tim, snowcanyon

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