# Moving state residency before leaving US



## tenant13

I currently reside in NJ and work in NY. I'm planning to leave US and spend most of my time traveling with summer breaks in one of the EU countries where I'm originally from and where I own real estate. I was thinking about moving my US residence to one of the states that doesn't charge income tax -like FLA - but it seems really complicated and perhaps unnecessary, especially if I don't actually plan to reside in that state.

Has anyone tried to do that and could share their experience? I rent my place in NJ so once I move my physical address here will become invalid anyway. It would be fairly easy to hire a mail service with the address in Florida (or any other state) but what about the driver's license and such? Am I even allowed to have one without US residency?


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## lat19n

The thing about Florida is a lot of non-residents lie and cheat their way to get the cheaper resident rates on college tuition (a substantial difference). I think you need 6 months residence to be a 'resident'. 

Fwiw - we lived in Florida for many many years. When we sold the house and moved to Mexico we registered a friend's address (different county) for change of address purposes with the post office. The Sup of elections picked up on that without our intervention and automatically registered us to vote in her country (and changed our official address to be the street address of the sup of elections).


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## tenant13

Well, you've actually lived in FL and had friends that would allow you to use their address. I've never had anything to do with Florida nor do I want to. I'm not denying that i want to "lie & cheat" the system by moving the residency to Florida, I just wonder if that's possible and feasible. I won't have ANY physical residency in the US so whatever address I'll use for my mail is already somewhat of a cheat - banks and credit card companies would likely not be happy about knowing that.


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## lat19n

My point was subtle - but you missed it. We never used our friend's address as ours - we simply told the PO to forward our mail there. Obviously the PO was not about to forward our US mail to Mexico. The act of forwarding our mail into a 'new' county was enough for us to be registered to vote in that county (even if we can only vote for presidents and senators). Just my 2 cents.


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## tenant13

I missed your point indeed but your voter registration address remained in the same state, I doubt forwarding my mail from NJ to FL would produce the same result.


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## Nononymous

I don't know too much about this because I don't comply with US taxes, but if you're planning a long-term move and intend to continue filing US taxes, then it's likely very smart to move your residency to a low-tax state. Some of the high-tax states can be real *******s about claiming you as a resident forever and wanting their state taxes. (I assume that you'd only pay state taxes if you owed federal taxes, but most US citizens abroad with normal jobs don't typically owe anything.)


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## Bevdeforges

Why do you want to maintain "US residency" at all?

For voter registration purposes, your last legal address in the US is where you vote from. Voting from overseas means that you can only vote in Federal elections - i.e. for President, US Senate and US Congress. But you don't have to be living at that address to be able to vote from there.And voting from a state doesn't give you "residence" there necessarily.

The other side of your plans is probably the tricky one. If you're originally from an EU state (and own property there), then I'd expect that you would probably want to establish your residency there as long as you still have citizenship there. You may want to check to see if there is any way to do a driving license exchange in your country of origin, but in most EU countries you can only drive for a year on a foreign (i.e. US) license anyhow. The States are becoming much stricter about having to prove your state residence in order to renew (or obtain) a driving license, and to exchange for a European license, it is often necessary to prove that you were resident in the state for a year or more before you moved to Europe.

As far as taxes are concerned, if you have US citizenship, you'll still have to file an annual tax return declaring your worldwide income. And the country in which you claim residence will probably want you to do the same. Simply maintaining a mailing address or a drivers license in a US state does not mean you would have to file a state return. If you are drawing income from that state, then all bets are off.
Cheers,
Bev


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## tenant13

I'd like to keep my US credits cards, not rock the boat with IRA custodians and have my SS payments down the road deposited in US banks. There might be other (likely financial) reasons that I can't think of right now.
I do know that I'll have to file taxes in US but having a residency in FL would make it a bit simpler - a lot of mail handling companies are located there.
As to the EU: I live in NJ for 30 years but I never had to make any official moves to let my country of birth know that I'm no longer a resident. I maintain the same address since I was born and pay local taxes from the rental income so for all the practical purposes I'm still the resident there. I could just get a local driver's license. And I'm not planning to stay anywhere long enough to be taxed as a resident.


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## lat19n

tenant13 said:


> I'd like to keep my US credits cards, not rock the boat with IRA custodians and have my SS payments down the road deposited in US banks. There might be other (likely financial) reasons that I can't think of right now.
> I do know that I'll have to file taxes in US but having a residency in FL would make it a bit simpler - a lot of mail handling companies are located there.
> As to the EU: I live in NJ for 30 years but I never had to make any official moves to let my country of birth know that I'm no longer a resident. I maintain the same address since I was born and pay local taxes from the rental income so for all the practical purposes I'm still the resident there. I could just get a local driver's license. And I'm not planning to stay anywhere long enough to be taxed as a resident.


>> And I'm not planning to stay anywhere long enough to be taxed as a resident
<< I think you will ALWAYS be a tax resident somewhere.

>> I'd like to keep my US credits cards
<< As long as those accounts are long standing that shouldn't be a problem.

>> not rock the boat with IRA custodians 
<< they won't give a hoot. BUT if you have an annuity issued from a particular state - and you leave that state and try to anuitize (sp?) it - your options will be severely limited - like immediate or 30 year.

But - once you tell your 'existing' brokerages you no longer reside in the US they will limit your investment options. You can no longer invest in mutual funds - but you can invest in etfs.


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## tenant13

<< I think you will ALWAYS be a tax resident somewhere.

You might be right but since I must file in US anyway I might as well stick to being a US tax resident but maintaining my domicile here.

>> I'd like to keep my US credits cards
<< As long as those accounts are long standing that shouldn't be a problem.

I hope so but from what I read so far, maintaining a US address and a phone # on file is a necessity for credit card companies. Banks are a bit better with that.

>> not rock the boat with IRA custodians 
<< they won't give a hoot. BUT if you have an annuity issued from a particular state - and you leave that state and try to anuitize (sp?) it - your options will be severely limited - like immediate or 30 year.

But - once you tell your 'existing' brokerages you no longer reside in the US they will limit your investment options. You can no longer invest in mutual funds - but you can invest in etfs.

They may not give a hoot but IRA distributions are tricky in terms of how they are treated in other countries. I'd rather avoid unnecessary foreign pensions paperwork sent overseas.


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## Bevdeforges

First of all, you don't get to choose your tax residence. It is determined by the "facts and circumstances" and according to the law of the various countries you are involved with. In essence, you are always considered tax resident in the US if you have US nationality. And you can be tax resident in two or more different countries, depending on their tax laws.

It's perfectly possible to have credit cards and bank accounts in the US with an overseas address. (I do.) Some larger banks are real PITA about this - but if you're a long time customer they'll probably cope. Or find a smaller bank that will work with you. But, it will be harder to open a new account or credit card in the US after you have moved out of the US. There are a few restrictions on US credit cards with a foreign billing address, but nothing you can't manage.

On the other hand, having a US mail drop address doesn't make you resident in the US or in a particular state of the US.

For IRA withdrawals, you can always have the withdrawal deposited in your US bank account, and then transfer the funds from there to an account elsewhere in the world. (Again, I know this from personal experience.) Tax treatment depends on what country you are resident in and what the relevant tax treaty is with the US. Same applies to US Social Security, though direct deposit of US SS is available in many countries overseas and besides getting an excellent exchange rate, you also avoid the bank transfer fees.
Cheers,
Bev


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## tenant13

Bevdeforges said:


> First of all, you don't get to choose your tax residence. It is determined by the "facts and circumstances" and according to the law of the various countries you are involved with. In essence, you are always considered tax resident in the US if you have US nationality. And you can be tax resident in two or more different countries, depending on their tax laws.


All that is true. I can however choose to spend less than 183 days a year in my country of birth - a minimum necessary to establish tax residency. There's an issue of a domicile, which is understood there in exactly the same way as it is in US when it comes to state taxation and that is one of the reasons I want to maintain a strong presence in US and minimal there. For the other half of the year I plan to be a tourist somewhere. I also plan to establish residency - possibly a domicile down the road - in Panama or a similar country that doesn't tax foreign personal income. That is not the case with my country of birth: had I established a tax residency there, I would have been taxed on my US sourced income simply because the threshold is very low and tax rates higher than in US. Yes, there is an agreement about "avoiding" double taxation but that only works for people with truly minimal income - even after being fully taxed in US I would have qualified to pay more in Europe. 



Bevdeforges said:


> It's perfectly possible to have credit cards and bank accounts in the US with an overseas address. (I do.) Some larger banks are real PITA about this - but if you're a long time customer they'll probably cope. Or find a smaller bank that will work with you. But, it will be harder to open a new account or credit card in the US after you have moved out of the US. There are a few restrictions on US credit cards with a foreign billing address, but nothing you can't manage.


I have bank presence in other countries and other credit cards that I can I use in different parts of the world so I'm only interested in US CCs that come with travel bonuses and no foreign fee transactions. Those are big banks cards - like Chase, Citi and Amex. I doubt that Chase would be happy awarding me boatloads of their UR points if I were to officially move out of US. 




Bevdeforges said:


> On the other hand, having a US mail drop address doesn't make you resident in the US or in a particular state of the US.


That's correct. That's why I want to properly establish my residence in FL - even if it takes living there for a few months. 



Bevdeforges said:


> For IRA withdrawals, you can always have the withdrawal deposited in your US bank account, and then transfer the funds from there to an account elsewhere in the world.
> (Again, I know this from personal experience.) Tax treatment depends on what country you are resident in and what the relevant tax treaty is with the US. Same applies to US Social Security, though direct deposit of US SS is available in many countries overseas and besides getting an excellent exchange rate, you also avoid the bank transfer fees.


If I were to have my IRA withdrawals and SS payments deposited in the bank of my country of birth, the bank would be obligated to withhold 18% up to a certain amount received and 32% if the amount is higher. I would have received some money back as a refund but not all of it. The tax treaty doesn't completely eliminate double taxation, it just ensures that tax obligations are met in both countries - as I mentioned above lower thresholds would saddle me with extra tax even after paying taxes in US.

I will likely have these payments deposited in Panamanian bank - but Citi or HSBC would be fine too. Both have international accounts that work for expats.

Anyway, whatever I plan is a bit shady but not illegal. I just want to make sure that my FL move is kosher. So far I found two highly recommended links:

https://www.sbimailservice.com
https://www.escapees.com/education/domicile/

Cheers,
Bev[/quote]


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## Bevdeforges

Just be careful about any residence you may or may acquire here in Europe. Generally speaking, the 183 day rule isn't part of the law per se, it's more a matter of where your "centers of interest" lie - though it sounds like you're safe on that score.

There are a range of US tax treaty provisions - though I expect you've already looked into that. (I know I've been comparing things with a friend of mine in Germany. France does not tax US "government pensions" - which includes US SS and IRA/401K withdrawals - whereas Germany taxes them, denying the US the right to tax them, as does the UK. As long as you know which treaty you're dealing with.)



> I doubt that Chase would be happy awarding me boatloads of their UR points if I were to officially move out of US.


No idea about the UR points (or even what they are), but I do have a Chase CC which has my French address as the billing address. No real problems, but if you're after the bonus points, I guess you get back to the US often enough to use them for whatever they're good for. Obviously not my case.



> If I were to have my IRA withdrawals and SS payments deposited in the bank of my country of birth, the bank would be obligated to withhold 18% up to a certain amount received and 32% if the amount is higher.


I think you may have misunderstood me. I was suggesting that you have your IRA w/d and US SS (if you like) deposited in your *US* bank account (with or without withholding for US and state taxes). Then you can use an FX account or something like Transferwise to transfer money as you need it to your bank account(s) elsewhere.

But no, nothing you're doing is "shady" - you have every right to structure your finances to best fit your circumstances, as long as you stay within the law. Or as they used to tell us in business school, there's nothing wrong with tax avoidance. It's tax EVASION that's illegal.
Cheers,
Bev


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## tenant13

Chase UR points are great for converting to miles or hotel points - I get to fly business class for free when I stay on top of that stuff. It's work but it's also a harmless hobby that actually saves me money, can't beat that. 

I'm concerned with NOT moving my "center of interest" into unfavorable tax situations, I intend to keep US address.

I only just started looking into all this stuff but I have a few years to get it right and am pretty diligent when it comes to money. If I weren't, I wouldn't be able to plan my life the way I do and even have this conversation


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## lat19n

BofA only has our Mexican address and we have a Blue Rewards CC with them. It is a free card, has excellent exchange rate, and no other fees. It earns points against our travel expenses (and other expenses but travel is the best option). We have an HSBC Mexico CC - on par with a gold amex card or better - also free and earns rewards as well. We had a green amex card with a lot of rewards which we just rolled over to AeroMexico and we will now close out the amex account. We have a Citi card that has a lifetime of rewards which we would like to close out but we need to find a new home for the rewards.

After reading an earlier post - I did a quick internet search. Nearly 40 years ago my wife and I ran off to St Croix USVI and got married. At that time it was the simplest procedure. Complete application, pay fee, show up at the courthouse... We pulled 2 people off the street for witnesses and the taxi driver took the wedding photos. We were back diving later that afternoon. Anyway - I mention that because apparently you can become a resident of St Croix (a US territory) in as little as 30 days. St Croix is a very special place.


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## tenant13

Thank you for St Croix suggestion. It seems to work in a similar way Puerto Rico does. Both are interesting options - including actual living. I think in my case Florida might be a better option since I see myself moving around a lot and Miami aside from being in a tax friendly location is also a convenient hub for Central and South America. That may come handy if I ever have to make personal appearance at DMV and such.


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## lat19n

If you literally mean Miami - my choice would be the Brickell area - along the bay. But I have expensive tastes.


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## tenant13

Well, no - not literally. I don't want to live in US at all. But since I'm keeping my citizenship and I cannot legally be a "stateless" US expat, I'm going to move my domicile to Miami. It should simplify my taxes and if I ever have to appear there in person, Miami is not a bad place to travel through.


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## lat19n

I'm confused - I thought your goal was to get out from under the requirement of paying NJ state taxes (the rest of your life) if you moved directly out of the US and were looking for an interim locale without state taxes. ?? Then you seemed to have shifted to maintaining a 'hub'.

I am a US citizen and I am very 'stateless' (in several ways perhaps  )


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## tenant13

I meant the airport hub. It's an AA gateway to Latin America.


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## lat19n

What did you mean by this - "But since I'm keeping my citizenship and I cannot legally be a "stateless" US expat..." ?


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## tenant13

A US citizen is always a resident of at least one state. 

https://www.bogleheads.org/forum/viewtopic.php?t=90214


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## Bevdeforges

tenant13 said:


> A US citizen is always a resident of at least one state.
> 
> https://www.bogleheads.org/forum/viewtopic.php?t=90214


Not true. There are plenty of us US expats living overseas who are still US citizens (often dual citizens) but who have no residence in any US state - certainly not for tax purposes.

The convention for voting is that, as a US citizen living overseas, you vote from your last legal residence in the US (e.g. in my case, the state of California) but that does NOT make you tax resident in that state. Some states are a bit sticky about letting go of tax residents, but generally speaking you need to have some financial/income link to the state to retain the tax bond.
Cheers,
Bev


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## tenant13

From what I understand, if I don't fully move my domicile to another state, NJ will still ask me to file a return because my income will be higher than 20k (Full Year Non-Resident)

https://www.taxesforexpats.com/expat-tax-advice/statedocs/NJ residency.pdf


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