change residency

[pymmint]

I understand that the 2 best states to establish residency are South Dakota and Texas, apart from the extreme weather in each what are the benefits of each; Are there other states ? Also in one of the newsletters from Workers on Wheels, there may be a problem on home state tax, below is the short version of the article: Your Tax Domicile Doesn't Change Just Because Your Address and RV Registration Do Your tax domicile might not be where you think it is. Tax expert CPA Martin Shenkman shows where changing your address, registering your RV, and registering to vote may not change your home state, domicile.

[Bethers]

You'd have to talk to your own acct about that - mine says my state is SD - as that is my legal residency now. PA tried to claim me after I worked there one season - they didn't win.

I researched and found that for me SD was the best in all ways - least expensive taxwise was the best. TX would have cost me more and would require an annual vehicle inspection. While everyone will tell you TX is ok with you extending that inspection - don't go outside the US without doing so. So, this year, coming back from Alaska, and planning to go back there next summer, I'd have to go back to TX to get my inspection. And my insurance would have cost more. It was between those 2 states for me, and I elected SD. Many on here have elected TX, but most of them spend part of each year (or closer to all) in TX. I can't tell you which will work better for you - or possibly not changing at all.

[chalet05]

I agree with Beth.

Unless you own property in another state, if you take up residency in SD, I wonder how any other state can be your 'domicile'.

[rvgrammy1953]

We were going to change our residency to SD this year....what stopped us was the increase in our truck & 5er insurance....it would have tripled with our current carrier...and changing insurance companies would have messed up our budget cause we also have other insurances packaged with the truck & 5er which gives us a discount....so most of our mail goes to SD for forwarding and we maintain a PO Box in PA for voting, insurance, and vehicle registrations....I know, I know, we still have to go once a year back to PA for the annual inspections on them, but we're there anyway to visit relatives and spoil the DGD....the good thing is that our Fed. & State income are not taxed in PA....so we only pay Fed. income tax on them.....For now, this will work for us....

[Redwahine]

Full time RVers choose a state of residence based on many factors and it depends on your specific needs. To declare your state of domicile as referenced by the IRS, is your intentions to make it you legal domicile. Driver's license, voter registration, vehicle registration, address, etc is the first step. But the IRS likes to see your Fed tax records reflect your domicile's address as well as social security. If any agency questions your official domicile a form from IRS or SS with your address pretty much fulfills requirement to prove domicile.

One of the reasons many of us want one of these states is because they do not have a state income tax. Which saves $$. However, even though my legal domicile is TX, if I earn money in Oregon (or other state that has state income tax) , either physically working there or receiving rent for a property, Oregon wants it tax for the money earned in OR. Each state has different rules as to whether they want tax from you if you earned it in their state. Good question for your tax advisor.

More recently SD is becoming top choice for many RVers. Many Health insurance and vehicle insurance is cheaper in SD. Vechicle reg is cheaper and no annual exam and great mail forwarding service for year round travelers.

I am not full time. However, I have begun getting my ducks in a row for the future. Up until this year I was still a legal resident of Hawaii, including Hawaii drivers license with my TX address Really confused anyone that needed to see my ID. Also voted in Hawaii by absentee ballot. So this year I got my TX drivers license, registered to vote, made appropriate changes with IRS and SS, etc. Since I currently live in TX, its just is easier for me to pick TX. And if and when I hit the road, I will have to plan an itinerary that includes a visit to TX each year for the vehicle inspection. Probably during the fall or spring on my way to or from Florida for the winters

[rvgrammy1953]

Full time RVers choose a state of residence based on many factors and it depends on your specific needs. To declare your state of domicile as referenced by the IRS, is your intentions to make it you legal domicile. Driver's license, voter registration, vehicle registration, address, etc is the first step. But the IRS likes to see your Fed tax records reflect your domicile's address as well as social security. If any agency questions your official domicile a form from IRS or SS with your address pretty much fulfills requirement to prove domicile.

One of the reasons many of us want one of these states is because they do not have a state income tax. Which saves $$. However, even though my legal domicile is TX, if I earn money in Oregon (or other state that has state income tax) , either physically working there or receiving rent for a property, Oregon wants it tax for the money earned in OR. Each state has different rules as to whether they want tax from you if you earned it in their state. Good question for your tax advisor.

More recently SD is becoming top choice for many RVers. Many Health insurance and vehicle insurance is cheaper in SD. Vechicle reg is cheaper and no annual exam and great mail forwarding service for year round travelers.

I am not full time. However, I have begun getting my ducks in a row for the future. Up until this year I was still a legal resident of Hawaii, including Hawaii drivers license with my TX address Really confused anyone that needed to see my ID. Also voted in Hawaii by absentee ballot. So this year I got my TX drivers license, registered to vote, made appropriate changes with IRS and SS, etc. Since I currently live in TX, its just is easier for me to pick TX. And if and when I hit the road, I will have to plan an itinerary that includes a visit to TX each year for the vehicle inspection. Probably during the fall or spring on my way to or from Florida for the winters

Just don't tell a SD Insurance companies that you are a Full-timing RVer....we did, the insurance quote tripled.....something about issues when you are traveling....but this is something new in the last year.....a lady at Americas Mailbox said that they (insurance companies) have caught on about full-timers using SD as a home base residency, so feel they need to charge more for travelers....

[Bethers]

Lori, my insurance is lower and I tell all of them I'm full time.

[Liz]

I kept FL as my state of residence when I started full-timing. No state income tax, no vehicle inspections. For now I am using my dd's address, and she handles my mail for me. If that ever changes, I might switch to SD for mail-forwarding service.

[Getupngo]

For tax purposes, domicile is really important only to the states and some of them are aggressive about what they see as tax dodges -- such as taking up residence in income tax-free states. I think IRS doesn't give a fat rat's patootey where I live, so long as they have an address for me and I file returns. I don't know about other states, but Utah contends that your domicile is a place to which you intend to return, even after an extended absence.

So if I were to claim SD as my domicile and do all those happy things -- change my driver license and vehicle & voter registrations -- the state could come back at me later for prior-year taxes if I returned to live here. I know because I worked at the Tax Commission & saw them do it. One example is one couple who rented their Utah home when they went to Japan to teach English for five years. When they returned, the state hit them up for taxes on all of their foreign earnings because they came back.

So I would consult a CPA or tax attorney. It's important to know the law. It's important to cut all legal ties to a state. Something as simple as buying a resident fishing license in your old state can pull the whole house down. And the states look for it. Airline pilots often try to claim a Texas legal residence, for instance, while having their families live near their home hub in a state that levies income tax.

As it stands, I still own property in Utah, so I would have to sell out completely if I wanted to go the SD route.

[Birdie]

I looked at costs of health insurance, primarily. Texas had the best deal with my brother's home, which is where I stay when needing S&B coverage. I vote here (just did), pay county tax for personal property, as and if required, get inspections and license here and my retirement checks. So the big swinger was medicare supplement was a better price in this neighborhood. Was about double in OK where I own property. So this is warmer and is now 'home'.

[Bethers]

Janice, you hit the nail on the head on the domicile bit. I do not return to a state like that - at least not so far. I'm all over the place. Had I just changed to SD, and then spent 1/2 a year back in the state I had previously - I could understand them arguing the point - although I didn't have a residence there. But never did that - I truly am a gypsy. In some ways I'd be the perfect candidate for a national id if ever there was such.

[pymmint]

Thanks for all your input, I did some checking the other day and came up with some things to consider, but what other kinds of questions needs to be considered, does a person need to look for in establishing residency; so far I have: voting, vehicle registration, drivers license, vehicle insurance (although when I contacted GEICO, it was more in SD than in VA, my current state and YES I mentioned that I would be full timing), any others ? Since I am fast approaching Medicare ? is that something that would make a difference too, my primary health insurance will become my secondary insurance when Medicare kicks in, but is that something to consider too ? Any other things to look for ? Inquiring minds want to know.

[Getupngo]

You seem to have covered the basics really well. Just thinking, thinking ... if you do any library book e-borrowing, I'd get a library card in SD and NOT use the library from your old home state. I say this because I scour various libraries (from areas in which I have lived/volunteered) on line looking for books I want. May sound small, but tax agencies are small-minded.

By the way, just because you have a SD residency, it doesn't mean you are hereafter free of paying state income taxes. If you earn income in any other state while camphosting or whatnot, you have to file returns and pay taxes to the states in which you worked -- if they have an income tax. Keep track and make sure at tax time you get W-2s from all of your employers. Correct me if I'm wrong, Beth, but I even think some campgrounds include the value of your hookups as part of taxable compensation.

[Bethers]

So far I haven't had the hookups included on any of my jobs. Different accountants will say differently on that, also.

As to insurance, I'd check different carriers and not be locked into one.

The one area I'd be very sure of if I was you is the health insurance. Until you have medicare, if you have to change, that could be a deal breaker if you need to privately unsure yourself.