No, they are not. That would be an entirely different situation, obviously.
Bitcoinā¦the Nasdaq of the 2010sā¦āvalue based on nothingā. It will get much worse!
I peeked back in to see what is being said in year since i last posted here, with the market up so much.
My goal still stays the same. Iām sure much of my market gains will evaporate once or twice before i retire (am 51). But it is fun to watch.
I plan to leave my property tax bill behind when i retire. My hood is not good for retirees. They get a small tax break, but Iām not emotionally tied to it, so i will just retire out of the area. That way i can pay cash for a house elsewhere when i sell this one.
They wouldnāt. Thatās the point.
Where is this belief that somehow if seniors get a school tax exemption that students are going to end up in a one room wooden school house? There are other ways, as we have discussed, to collect taxes for the schools. Our schools are highly ranked nationally despite the senior tax break.
From an article I read:
Biggest retirement regrets:
- Not saving enough money
- Leaving the workforce too early
- Not having a plan for your free time
- Not planning for your retirement goals
- Not adjusting to the required lifestyle
- Drawing Social Security too early
- Not retiring earlier
- Not downsizing earlier
- Making a rash moving decision
- Depending too much on debt in peak earning years
- Not accounting for taxes
- Making the wrong decisions for surviving spouses
- Not getting professional financial advice earlier
https://www.cheatsheet.com/money-career/the-biggest-regrets-people-have-about-retirement.html/
Iām eying #7 and #8 right now.
Good list. 
Are you thinking about making your new pad your permanent digs soon?
On financing school, itās not obvious that local taxes and decision-making are efficient or make sense. In Canada, where the schools significantly outperform US schools (see https://cdn.theatlantic.com/assets/media/img/posts/pisa-2012-results-overview%20graph%201_larger.jpg) are funded provincially. You can move from BC to Alberta if you want lower taxes, but Iām not sure how much movement you get.
If we have to fund it by local taxes, I prefer that my town invests more in schools than other towns and gets better results (or at least a better reputation) as this will increase property values in the town. I also consider supporting education a moral obligation. Iām not deeply sympathetic with the plight of cash poor but equity rich seniors relative to potentially cash constrained and equity poor younger folks but I do agree that there is a dearth of financing vehicles for the former group to tap the equity. We should remember that, for many, other seniors paid taxes to help fund schools when their kids were of school age and for those who didnāt send their kids to public school, you got to live in a town with higher property values and neighbors who valued an educated populace and seniors before you paid for that.
Switching to less controversial and more interesting topics, I was flying this past week and ran into old friends on a plane. They have moved for the winter to a very nice town on the Gulf Coast of Florida for part of the year. The husband pointed out that from a tax standpoint, Florida would be a very good place for me. All I need to do is not be in Massachusetts less than 50% of the time and I could stop paying Massachusetts income tax (5.1% for most income and 12% for other income which is largely short-term capital gain, which I donāt have anymore after getting out of the hedge fund business years ago). Since I travel about half the year, I wouldnāt have a very hard time eliminating the tax if I had a residence elsewhere. I wouldnāt need to be in the other state for 51% of the time. California, where have been staying in the winter, is none too useful on that score because it probably has a pretty decent state income tax, but Florida would be. [Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Tennessee and New Hampshire tax only dividend and interest income, not earned income.] This would be a pretty considerable saving. I could afford the mortgage or at least dramatically reduce my net cost on a house or condo just from the tax savings. Hmmm.
This wouldnāt save property tax but just state income tax as long as I kept my Massachusetts house (or another Massachusetts house).
Logistical details are starting to pop into my head.
- I wonder if I would have to file a non-resident return in Massachusetts. (If Iām in Massachusetts for fewer than 183 days, Iām not a full-time resident and I wouldnāt be a part-time resident either as I read the website).
- What happens if my wife is in Massachusetts for more than 183 days? Would we need to file separately? I make the vast bulk of the income so Massachusetts wouldnāt get much but it could complicate things.
- Would I need to change the tax domicile of my company as well?
Any thoughts?
IIRC, you have to register to vote in FL, your cars have to be registered in FL, and have a residence there and be there for 51% of the year or more. Itās ok to do this to minimize tax burdens in MA. Seems no different than minimizing tax burdens in oneās county.
Is the income generated in MA earned or unearned income?
The income is primarily from a mix of salary from a C-corp and profits from a pass-through entity that I own a partial interest in. The income from the passl-through entity comes from all over the world. Almost none of it is from Massachusetts. The C-corp could be located anyplace. Then there is investment income.
From a Florida residency stand point, when I take trips starting and finishing in Florida, the trips count as being in Florida. Without that, Iād never live anyplace. When I investigated living in Canada (per my wifeās desires), I discovered that any business trips that I took for my company, if it were domiciled in Canada, would be considered time in Canada.
Just donāt make any money in MA.
From that website:
"Nonresidents
If youāre a nonresident with an annual Massachusetts gross income of more than either $8,000 or the prorated personal exemption, whichever is less, you must file a Massachusetts tax return.
You are an individual nonresident if you are neither a full-year or part-year resident.
Nonresidents use Form 1-NR/PY Massachusetts Nonresident or Part-Year Resident Income Tax Return."
IIRC, states with an income tax expect you to pay tax based on the percentage of work days you spent working in the state. States with a graduated tax usually base the rate on your worldwide income, which is a negative for CA.
In practice, the state has no way to count how many days you are in the state, unless you are very high profile, like a professional athlete. And some have a minimum number of days before you are liable for income tax, I donāt remember if MA is like that.
Some states are getting very reluctant to āallowā you to give up residency. If you have a residence and a business in a state, they may fight to claim you are still a resident, even if you spend less than 183 days in the state, and have done things to establish residency somewhere else. I think NY has a reputation for this.
I can see that this is a complicated issue. Need to investigate.
@BunsenBurner yeah, the plan is to move to the Cape eventually.
DW has made a huge list of stuff to do on the current house before we sell, so it might be a while. B-)
Gotta listen to your realtor, NRE!
Thereās also issues around tele-commuting. Just connecting to a computer located in another state is enough for some states to treat you as working in that state and therefore owing income tax.
There may be some hope - last summer the House passed a bill called the " Mobile Workforce Simplification Act", which would exempt most people from owing income tax to a state where they worked 30 days or less, except their home state. The Senate hasnāt taken action on it yet, though.
What to look for if you need a financial adviser:
https://www.seattletimes.com/business/heres-how-to-know-if-youve-picked-a-good-financial-adviser/
Donāt see that one passing, as it would also exempt millionaire ball players, and all other kinds of income that is taxed. You play one NFL game in California, and CA considers 1/16th of your salary to be income earned. in state. heck even the NYS gets in on NYSE on the money train: when the CEOās of an IPO ring the bell on Day 1, New York is awaiting its take even if that corporation has no nexus within the state.
No it wouldnāt. I said āmost peopleā deliberately. From the bill summary:
It would be a wash for most states, as long as income tax rates are relatively similar, because when you get taxed by another state for work done within that state, you get a credit against the taxes owed to your home state.
Itās a huge compliance burden and expanse, and most companies and people never bother tracking or paying it. I know Iāve never filed or paid taxes to another state because I had a business trip there.