Hi Ron,
First of all, I must note that Google Answers provides general
information, not professional tax advice. The information below is
general information and shouldn't be relied upon as a substitute for
professional tax advice.
---------
"Nevada has no personal income tax."
source: Nevada Department of Taxation.
http://tax.state.nv.us/taxnew/overview.htm#incometax
Thus, since there is no state income tax in Nevada, the question here
is really about the extent to which you'll have to continue paying
California income tax.
There are two basic rules on this:
(1) If you're considered a California resident, you have to pay
California taxes on ALL your taxable income;
(2) If you're considered a Nevada resident, you'll still have to pay
California taxes on your California-source income.
See:
"Basic Rules. There are two basic rules an individual needs to keep in
mind if they wish to avoid California tax. The first is that a
California resident pays California tax on all their income.
...
In addition, California generally taxes California-source income,
regardless of the recipient's residency. Thus, even if someone
successfully establishes residency outside California, they will still
be taxed on all services they perform within the State of California,
rental income from California property, proceeds from sales of
California real estate, and other types of California source income."
source:
Busch Firm: Avoiding California Residency
http://www.buschfirm.com/articles/tpcArt_avoiding_ca.html
As indicated, if you're a California resident, you'll have to pay
California state income taxes on all your income.
So how is California residency determined?
"Presumptions. In determining residency, California law also provides
two presumptions. The first presumption is that a taxpayer who, in the
aggregate, spends more than 9 months of a taxable year in California
will be presumed to be a California resident. This presumption is not
conclusive, and may be overcome by satisfactory evidence that the
individual is within the State for a temporary or transitory purpose.
However, for someone planning to avoid California residency, they
should do their best to avoid being in California for more than 9
months.
The second presumption is that an individual whose presence in
California does not exceed 6 months within a taxable year and who
maintains a permanent home outside California, is considered as being
in California for temporary or transitory purposes provided the
taxpayer does not engage in any activity or conduct within the State
other than as a seasonal visitor, tourist, or guest. For most business
people, this is a very difficult test to meet."
source:
Busch Firm: Avoiding California Residency
http://www.buschfirm.com/articles/tpcArt_avoiding_ca.html
Also see:
California Franchise Tax Board - Are You a California Resident?
http://www.taxes.ca.gov/resident.html
Guidelines for Determining Resident Status
http://www.ftb.ca.gov/forms/misc/1031.pdf
A TEMPORARY AND TRANSITORY VISIT WITH CALIFORNIA RESIDENCY
taxlitigator.com
http://www.taxlitigator.com/articles/161338.htm
----------
search strategy:
"california resident," "california tax", nevada
I hope this helps. |
