For those of you who are planning a move to New York State, our prayers go with you kids. You will now be paying the highest income tax of all the other 49 states.
On the other hand, take a gander at the list below. Setting up your tent in any of these locales mean you’ll be living large. These places have absolutely no state income tax:
- New Hampshire
- South Dakota
The Taxable Event
There’s a catch, though, if you’re relocating to Tennessee or New Hampshire. They have what’s called an Interest & Dividends Tax. Florida finds another way to squeeze some green from your purse. They’ve come up with and Intangibles Tax, whatever the hell that means.
Then there’s the “taxable event.” To qualify, you have to hit the mark in a trio of categories:
- How Far?
How far away is your old place to the new spot where you’ll work? The target is that you must have at least 50-miles of sunshine betwixt the two. Add to that, it must also be at least 50-miles extra travel-time than the distance from that old house of yours and your old point of business.
- How Long?
This can’t be a temporary gig for just a few days. You have to be able to say that you’re staying at the new shop for at least 39 weeks during the first year once you plant your roots near the new job.
- Moving Expenses.
To deduct this item, you have to spend the money to relocate within the first year of your new employment.
Some employers are the crème de la crème. They might slip you a reimbursement check for the move. This is not considered income. This money is excluded from any taxation. That conversely means you can’t claim relocation costs if you’re getting payback from the new boss. You can however deduct any amount over the reimbursement that you rang-up during the trek.
Some exceptions to the rule. Reimbursements such as preparation for the move, temporary lodging, meals, looking for a new house, equity losses, etc. will be taxed. Make sure you keep all receipts.
List O’ Deductions
Check this out. Here’s what you need to have proof of:
- Driving or shipping your vehicle (usually gas, tolls and 10-cents per mile wear-and-tear)
- Moving van costs
- Tipping the driver of the moving van
- Taking apart and putting back together things like an above ground pool
- Packing and unpacking
- Disconnecting and reconnecting utilities
If you’re going international, that’s an altogether new issue. Depending on the country, you’re going to have to support the government in the new land. Upside? It’s deductible from your U.S. tax.