3 ms·

Though it's not millions in this case, the top marginal tax rate in CA is 12%, so he's saving at most $850K if this was a one-time $7M payment. Not sure that 1

Though it's not millions in this case, the top marginal tax rate in CA is 12%, so he's saving at most $850K if this was a one-time $7M payment. Not sure that 12% is worth picking up my family and moving to another state if that's the only reason to relocate. CA and WA weather and lifestyle is much different than what he saw in Southern California (I'm guessing that's where he lived since he was in the music industry). I made that move (from SF Bay Area to Seattle) about 5 years ago (but for work, not taxes), and I'm thinking about going back to CA for the milder winters.

throwaway1777 6y ago
850k is worth moving to another state for a year, especially if this is not repeatable income, but that’s just me.
- Johnny555 6y ago
  I think it'd have to be more than a year if you really want to escape taxation. If you leave the state, earn $7M, then move back a year later, California is going to be taking a close look at when you actually earned that money. Though moving is easier and cheaper for a single person living in an apartment than someone with a family and house.
  - sushid 6y ago
    If it's legit, why does it matter? Presumably that person's song took off and they were able to forecast that they'd make $X, which was worth the move to WA.
    - Johnny555 6y ago
      If he's moving to escape taxation, it's not legit (in the eyes of the Franchise Tax Board), and if he did the work while he was living in California, they're going to want (and almost certainly will get) their share.
vmception 6y ago
You only have to relocate for a maximum 6 months and 1 day. As in, your US address needs to be in the lower tax state. So, if its after June when your windfall hits, that particular option is removed and you have to focus on offsetting deductions. But it resets January 1, every year :)

3 ms·

Though it's not millions in this case, the top marginal tax rate in CA is 12%, so he's saving at most $850K if this was a one-time $7M payment. Not sure that 1

by Johnny555 6y ago

throwaway1777 6y ago
850k is worth moving to another state for a year, especially if this is not repeatable income, but that’s just me.
- Johnny555 6y ago
  I think it'd have to be more than a year if you really want to escape taxation. If you leave the state, earn $7M, then move back a year later, California is going to be taking a close look at when you actually earned that money. Though moving is easier and cheaper for a single person living in an apartment than someone with a family and house.
  - sushid 6y ago
    If it's legit, why does it matter? Presumably that person's song took off and they were able to forecast that they'd make $X, which was worth the move to WA.
    - Johnny555 6y ago
      If he's moving to escape taxation, it's not legit (in the eyes of the Franchise Tax Board), and if he did the work while he was living in California, they're going to want (and almost certainly will get) their share.
vmception 6y ago
You only have to relocate for a maximum 6 months and 1 day. As in, your US address needs to be in the lower tax state. So, if its after June when your windfall hits, that particular option is removed and you have to focus on offsetting deductions. But it resets January 1, every year :)