Tax Question

[HUDcripple]

Also, there's about 13 states in which being in the military makes you exempt from paying taxes as a resident- Florida is one, not sure about your state.
- For me, I'm a California state resident, but I'm here in P'Cola. I called several representatives who basically explained that you have a "residence" and a "domicile", the domicile being sort of like your home of record- the place you entered the military from. The domicile you can't change, but the residence you can, if you wanted. In my case, there is a military clause stating that if you are residing- and for most cases, have PCS orders out of the state, then you dont pay taxes (for California) for the entire time your away from the state. And since I'm not a resident of FL, I basically paid NO state tax at all. And if thats the case, why evengo to the trouble of switching to FL (or the new state in your case). I'm not sure if your state is the same, most states have a different set of rules, but I would first see if its one of the exempt states, and secondly, google it's State tax form with "military exemptions" and see what comes up. As a last resort, call the State Tax Board to be sure...good luck

The reps you talked to were wrong; you can change your domicile. CA refers to your state of legal residrnce as your "domicile" and wherever you are now as your "residence". Each state changes the terms slightly, but it is the domicile you want to change.

The PSD form changes what the Navy treats as your domicile, but doesn't, by itself, meet the legal requirement to change it. To do this you must demonstrate an "intent to settle permenantly" in that state when you retire/separate. There are no litmus tests, but things like voting, getting a driver's lic, buying property, looking at property, etc all count. Even just making it known that you intend to settle in XXX counts.

Domicile changes are almost never challenged for military members, but CA is agressive at going after military income. If you get stationed there- and there is a good chance of that- they will tax your income. You might have trouble moving your domicile out of CA while you are living in CA. DO IT NOW.

States like PA (my state) only exempt military income, so you still have to pay taxes on interest and capital gains.

FL has an "intangibles tax", basically a tax on cash, stocks, etc. Lots of people blow it off, but it is there.

Also think about cars registration fees - PA is about $30. / year. Some states charge hundreds. Also think about sales tax on cars: Oregon doesn't have a sales tax. Most of the time you pay tax where you register a car. (If you take delivery in CA, then CA wants the tax if the CA rate is higher than your state's rate, they will send your state their cut)

Finally, avoid joint accounts: they make taxes in different states a *****. Better to have 2 accounts and fund them equally than to have a joint account.

 

[Brett327]

The reps you talked to were wrong; you can change your domicile. CA refers to your state of legal residrnce as your "domicile" and wherever you are now as your "residence". Each state changes the terms slightly, but it is the domicile you want to change.

The PSD form changes what the Navy treats as your domicile, but doesn't, by itself, meet the legal requirement to change it. To do this you must demonstrate an "intent to settle permenantly" in that state when you retire/separate. There are no litmus tests, but things like voting, getting a driver's lic, buying property, looking at property, etc all count. Even just making it known that you intend to settle in XXX counts.

Domicile changes are almost never challenged for military members, but CA is agressive at going after military income. If you get stationed there- and there is a good chance of that- they will tax your income. You might have trouble moving your domicile out of CA while you are living in CA. DO IT NOW.

States like PA (my state) only exempt military income, so you still have to pay taxes on interest and capital gains.

FL has an "intangibles tax", basically a tax on cash, stocks, etc. Lots of people blow it off, but it is there.

Also think about cars registration fees - PA is about $30. / year. Some states charge hundreds. Also think about sales tax on cars: Oregon doesn't have a sales tax. Most of the time you pay tax where you register a car. (If you take delivery in CA, then CA wants the tax if the CA rate is higher than your state's rate, they will send your state their cut)

Finally, avoid joint accounts: they make taxes in different states a *****. Better to have 2 accounts and fund them equally than to have a joint account.

Interesting, but I'd like to see an example of a case where CA went after a military member's income whose legal residence is in another state. I fit that scenario - come and get me you communist fvcks!

Brett

 

[Goober]

Interesting, but I'd like to see an example of a case where CA went after a military member's income whose legal residence is in another state. I fit that scenario - come and get me you communist fvcks!

Brett

Yep, two tours there and haven't coughed 'em a dime. They can get bent.

 

[KimberlyD]

If you don't feel like filling out the form mentioned above you can log into MyPay & clicking on State Withholding & turn off your state taxes completely thereby skipping the trip to the Perpetually Stupid Department.

 

[HH-60H]

If you don't feel like filling out the form mentioned above you can log into MyPay & clicking on State Withholding & turn off your state taxes completely thereby skipping the trip to the Perpetually Stupid Department.

I don't think that quite accomplishes the same thing. Your LES will list a particular state, you just will not be withholding anything. This was issue for me when I tried to register my car in FL as a resident for the first time. The DMV/MVA/whatever wanted to see my LES with the FL selection on it. If I had just turned off withholding but kept my previous state (CA) they would not have accepted it.

 

[Harrier Dude]

There's a reason that the vast majority of naval aviators are residents of Texas or Florida. Since you're from New York, I'd suggest Florida. We already have too many yankees in Texas.

 

[Brett327]

I don't think that quite accomplishes the same thing. Your LES will list a particular state, you just will not be withholding anything. This was issue for me when I tried to register my car in FL as a resident for the first time. The DMV/MVA/whatever wanted to see my LES with the FL selection on it. If I had just turned off withholding but kept my previous state (CA) they would not have accepted it.

Once again, bad gouge from the wives - shocking!

Brett

 

[KimberlyD]

If he wants to remain a resident of New York then yes, just turning off the state taxes will accomplish what he wants. There are benefits upon retirement to remaining a resident of New York & honestly, unless you get stationed at Ballston Spa, there is no reason to change.

Get off your high horse guys, not everyone wants to become a resident of Florida or Texas.

 

[MasterBates]

Kim, not evryone wants to, but I remember, when I was a married Ensign putting my wife thru the last 2 years at A&M-Corpus the $300+ I was NOT paying to Taxachusetts really helped. Since you cannot avoid the TX or FL tax structure (they get funded by property and consumption (sales) taxes) unless you live in base housing and never shop anywhere but the NEX.

I would rather not give MA money for their sociallist engineering programs, and have to pay local taxes too.

Even if you rent in TX you are paying the local tax indirectly, as part of your rent.

 

[HH-60H]

There are benefits upon retirement to remaining a resident of New York & honestly, unless you get stationed at Ballston Spa, there is no reason to change.

Yes, but wouldn't it be smarter to change back to NY residency after retirement? I don't know, I am just asking.

 

[KimberlyD]

Here's the thing ab NY, you DON'T pay state taxes if you're not in the state (greater than 30 days/year) so you can just turn it off, thus saving all that money monthly OR you can opt to just file a return at the end of the year & get it all back, NY gives military members a choice. So, if you need that $$$ monthly to make ends meet, pay tuition or you're just a self-motivated enough person to save it every month, then turning it off makes a lot of sense, if you are the type of person who needs to get a big check every year (& like the hassle of filing a return) in order to save it, then do it that way. It's a personal choice.

My parents maintained NY residency until the day of my Dad's retirement (seriously, we went fr the ceremony to the DMV, etc) b/c he wanted to be eligible for every benefit he could get when he returns to NY state in a few years when the last CVN is finished. NY is an interesting state, if you maintain residency there during your military career you're eligible for all sorts of educational benefits as well as healthcare benefits (hopefully he'll never need these but the Tricare for Life program sucks) when you return to the state plus you do not pay income tax on military retirement in that state so when he returns in approximately 10 years, he'll be saving even more (which he'll be spending in property taxes & heating costs!).

There are benefits to maintaing residency in your home state (Texas offers educational benefits to servicemembers enlisting fr Texas, etc) even if there is a state tax, before making a decision to switch residency, you should make sure that you aren't losing out on anything that will come back to bite you in the butt later.

 

[HH-60H]

Hmmm, that is some interesting stuff in NY. For me there was no question that I would ever return to my home state, CA, so it was a no brainer when I got to FL.

 

[KimberlyD]

My husband switched to FL, there is no way we'll ever reside in North Carolina & there are no benefits to continuing to pay them $$$ so he switched it but he researched it before making the jump.

 

[Whalebite]

My home of record is NY and am still paying NY tax despite changing my residence to FL and filling out the form and submitting it to Marine admin 3TIMES, and it was never updated.
I would like to keep NY as my state of residence, but change my state of residence for tax purposes, is this possible? After reading all posts, I still have no definitive idea of what to do. I could find no way on MyPay to stop witholding :
"You may change or stop withholdings for your current state only; you may NOT use myPay to change your state, file the initial state withholding form, or file exempt from state withholding. " when I enter "0" for witholding, it says i have not made a change to my status, but i am till paying $$$ every month to NY.
I would like to keep NY as my SOLR, for but change my tax to TX which i am now in, and leave it as TX to whichever state i move to next.

 

[bing]

I was able to change my state of residence to Fl, but keep my home of record as Ohio when I had the chance. I did this so that I would not have to file extra paperwork each year to regain my state taxes. I assumed this would be a hassle with the deployment schedule that I was heading into. I was told by a lawyer, like many have said in this thread, that all I needed to do was "fill out the paper work with my admin." A few years later, I found this to be wrong when the state of Ohio sent me a bill. They required paperwork to be processed as well. Not a big deal, just another hassel in the process of attempting to relieve some.
If I could go back, I would just fill out the form each year informing Ohio that I spent less than 30 days there and let them refund my money. I however was and unaware that withholding the state taxes was an option. I would look into the legallity of that just to make sure. Good luck and I hope it works out for you.