Moving Out of State? Let’s Talk Taxes!
Moving out of state? Let’s talk taxes!
There is no doubt you have taken the time to consider all the impacts of moving to a new state. You have probably researched schools, looked for a job, and maybe even found a home that suits your needs. However, moving out of state comes with another set of questions that many folks just don’t think about; how it will change their taxes.
There are several states where residents do not pay income tax such as Florida, Texas, and Wyoming. While this may seem like a dream, there is no evidence that these states are better off than states where residents do pay income tax. There may be no income tax but that often means that sales tax on items like groceries and clothing is higher like in Nevada. Since most of the state’s government budget for public services generally comes from taxable areas like income tax, they have to find other means to get the money they need to run those programs. In 2019 Washington chose to increase gasoline taxes and fees putting it in third place behind Pennsylvania and California for highest pump prices. Being aware of how your state receives the money for its budgeting can help you make a more informed decision on where to move.
If you decide to convert your previous home into a rental property, speak with a real estate agent who may be able to give you some advice on if it is a worthwhile investment. Having a rental property in one state but living in another requires you to file an income tax return in both states. You’ll need to report your income and expenses for both your current property as well as the one you have rented. Filing is important even if you experienced a taxable loss on your rental property. Speak with a financial advisor to come up with a good plan with enough time to file in both states.
Moving out of state is an exciting new adventure. Make sure to speak with professionals who will be able to give you the best suggestions as you move forward. If you are looking to move to California see our Moorpark homes for sale online. If you’re looking for a Westlake realtor as well, we would love to hear from you.