Take the 2-minute tour ×
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It's 100% free, no registration required.

I am about to start a relocation process across the US. I will be moving about 1,000 miles away from my current city. What should I be looking for to benefit from my relocation?

share|improve this question

2 Answers 2

Look for states that have no income tax. A lot of these states supplement their revenue with higher property taxes, but if you rent and do not own property in the state, then you will have no state tax liability.

Similarly, many states treat capital gains no differently than income tax, so if you make your earnings due to a large nest egg, then way you will still incur no tax liability on the state level

Look for "unincorporated" areas, as these are administrative divisions of states that do not have a municipal government, and as such do not collect local taxes.

Look for economic development perks of the new jurisdiction. Many states have some kind of formal tax credit for people that start business or buy in certain areas, but MONEY TALKS and you can make an individual arrangement with any agency, municipality etc. If the secretary at city hall doesn't know about a prepackaged formal arrangement that is offered to citizens, then ask for the "expedited development package" which generally has a "processing fee" involved. This is something you make up

ie. "What is the processing fee for the expedited development package, quote on quote"

States like Maryland and Nevada have formalized this process, but you are generally paying off the Secretary of State for favorable treatment. You'll always be paying off someone.

share|improve this answer
1  
regarding local taxes: Maryland adds a county /city income tax that is a percentage of the state income tax. VA doesn't have a county income tax, but they do tax personal vehicles. So moving to an unincorporated area may not make much of a difference. –  mhoran_psprep Sep 25 '12 at 10:07

Depends. If you can choose where to relocate to, then I second the "no income tax" states. But even of these chose wisely, some have no income taxes at all, others have taxes on some kinds of income. Some don't have neither individual nor corporate taxes, some tax businesses in some ways. Some compensate with higher property taxes, others compensate with higher sales taxes.

On the other hand, you might prefer states with income taxes but no sales taxes. It can happen if your current income is going to be low, but you'll be spending your savings.

If you don't have a choice (for example, your employer wants you to move closer to their office), then you're more limited. Still, you can use the tax break on moving expenses (read the fine print, there are certain employment requirements), and play with the state taxes (if you're moving to a state with less/no taxes - move earlier, if its the other way - move later).

Check out for cities that have income taxes. In some states it cannot happen by law (for example, in California only the state is allowed to collect income taxes), in others it is very common (Ohio comes to mind).

Many things to consider in New York. New York City has its own income tax (as well as Yonkers, as far as I remember these are the only ones in the State of New York). So if you want to save on taxes in NYS but live close to the city, consider White Plains etc. If you work in NYC its moot, you're going to pay city taxes anyway. That is also true if you live in NJ but work in the city, so tax-wise it may be more efficient not to live across state lines from your place of work.

share|improve this answer
1  
Some states have reciprocity agreements, which means you are taxed based on where you live, not where you work. Other states don't have these agreements, both states will want a piece of the pie. –  mhoran_psprep Sep 25 '12 at 10:09

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.