Considering Relocating to Washington?
Establish a Domicile in a Tax-Free State
The 2017 Tax Cuts and Jobs Act (TCJA) changes have spurred interest for many in relocating to Washington due to the tax advantages. TCJA limits the deduction for state and local taxes on personal tax returns to $10,000. In addition to the loss of the state and local tax deduction, states have been increasing their personal income tax rates over the years. This is especially costly to residents of high-tax states, such as New York, New Jersey and California, where the loss of this deduction adds an additional expense of 37% on any state income taxes over $10,000.
For example, if your property, state and local taxes total $100,000, you would have to pay an additional $33,300 in federal income taxes ($100,000 – $10,000 x 37%). Relocating to a low tax or no income tax state could substantially lower or even eliminate this extra tax burden.
If you are considering a move, be sure you understand what you need to do to establish domicile in Washington by downloading our checklist.
Unsure if relocation is right for you? Our wealth advisors can assist with helping to determine if relocation is the right tax strategy for you.
The views expressed are for commentary purposes only and do not take into account any individual personal, financial, legal or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. The opinions are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information.