Becoming a state resident... (Seattle: car registration, to buy, income)

[malkier22]

Becoming a state resident...

I am a military civilian that lives overseas and will continue to do so for my entire career. I own no property, land, or have any personal belongings in any state in the United States. We recently visited friends who love West Seattle and it is a possible retirement location MANY years from now. Unfortunately, until that time, I still must be tied to some state. I am currently attached to Virginia and am paying Virginia state income tax on my taxable salary and I am looking to remove that burden since I no longer live there.

I am curious of the short and long term tax implications for becoming a Washington state resident and if anyone else has experience with something like this.

thank you in advance if you have any advice

[brightcopperkettles]

I can't answer the particulars for your situation, but I can tell you that my husband is a retired Seattle firefighter, and his pension is nontaxed income; he retired on disability. I'm not sure about retirement for others.

I think the best thing to do would be to ask your accountant about this.

[Ultrarunner]

Definitely check with your accountant... I do have friends in the service and for tax reasons and auto registration... both Washington and Florida are popular with military folks.

One of my co-worker's husband is career military and they now live in California. She was stopped by the Highway Patrol for not having California Tags on her car while being employed here.

She went to court and told the judge that her husband is military and the citation was dismissed and the officer reprimanded.

Washington has no State Income Tax... and I also think that is true of Florida.

[bmsea]

Short term, Washington is a good choice because there is no state income tax. Car registration can be expensive in the City (Seattle Metro area) because of the RTID fees (what they're using to pay for light rail and subsidize rapid transit). Property taxes, this is the only place I've owned a home, but it seems reasonable.

Good luck!

[StealthRabbit]

search for a Forbes article "Tax-Free in the Rust Belt" posted 1 Aug. It might help.

WA, AK, TX, FL, WY have no income tax. (look into Sheridan, WY for a nice military retirement spot). NH only taxes investment income, but has quite high prop taxes (as does WA in my case... $10k/yr) WA has some beneficial estate taxation. It is a good state to create and hold your Living Trust, and be sure to hold your properties from other states in your WA trust. Thus it will be executed favorably, and uniformly. Gotta love that full 'step-up' cost basis of the Living Trust, too bad you have to die to get it ... Mine cost me less than $2000 to set up, with wills, health care directives, dependent trusts, designated distributions, and a family charitable foundation (donor advised fund)...

For retirement, you want to avoid states that have low tax thresh-holds, and tax all income. That can really hurt, after all, EVERYTHING goes out now, none of this "I'll just work a few hours Overtime to buy those new tires, firewood, or to pay the taxes..."