I was looking at the thread on where everyone is from and I was wondering about those of you who live in states with high income tax and/or high property tax. My question is: Is it worth it? For example, if you make $250K and live in California, income tax is about 10% - $25K per year. If you live one state over in Nevada, it's $0. Is it really worth that much more? And in some places around the country, property tax is 4-5%. On a 500K house, that would be $20K-$25K per year. While in other areas it's 1/2 of 1% or lower for a tax of $2500/year. Now, I know a lot of people live where they do for particular reasons... family is there... other businesses to maintain... unique features. So, what about those of you who can be more mobile? Have you considered moving to increase the bottom line? (NV, FL, WA, TN, TX are 0 income tax states). What about you that are in a state with a high rate? What do you do to lessen that? Any particular tricks you can disclose? Just curious from someone who may eventually relocate elsewhere.
I just moved from CA (Los Angeles) to Las Vegas and can tell you that the move was well worth it from a state income tax perpective. It is more money in my pocket and in my personal situation, the cost of living here is a lot less than where I moved from. My wife and I get to keep the additional 10% of our income right off the bat compared to when we were in CA, and I set that aside for longer term investments. I am also looking to go proprietary and with Bright HQ here and Echo opening up soon, this is really a great place to be in.
I know a guy who moved to Lake Tahoe, NV side and his income tax savings is making the house payment on a house there that's twice as big as the one he had in CA. But for me, Vegas is too hot and Tahoe/Reno is too cold. And there's not much in the middle.
What are the property taxes in Nevada? And just a thought on taxes...the ideal tax situation for a trader, before accounting tricks, would be to trade futures and live in a 0 income tax state and a big house for mortgage deductions. Think about it. Favorable tax treatment on futures can add a lot to the bottom line and help w/ compounding. Of course this may not matter as much if you're trading at a proprietary firm where they feed you capital.
Chomp. Munch. Gobble. Chew. So, that particular item won't help me I think Property tax is pretty low in NV. 1%?
1% property tax here in NV. As far as the heat here in LV is concerned, I will do my best to stay indoors and just crank up my a/c a bit during summer.
Cash, I am giving some serious consideration to moving. In NC I ended up paying about 6.8% in State Taxes which is way too much. Even to move to SC it would drop to 2% or so. The other thing I am giving some consideration to is trading in my IRA. I had thought about this from time to time but more and more I think why not. There is no margin and no shorting and no withdrawals until 59 1/2, but to use it for money I want to compound makes more sense than paying the govt to cover statues with sheets or farm subsidies. Paul O'Neill is talking about a complete overhaul of the tax system but I'll believe it when I see it.
But then you'd have to live in SC! Anyway, whatever O'Neill may do, the states will still make sure they get theirs.
"The other thing I am giving some consideration to is trading in my IRA. I had thought about this from time to time but more and more I think why not. There is no margin and no shorting and no withdrawals until 59 1/2, but to use it for money I want to compound makes more sense than paying the govt to cover statues with sheets or farm subsidies. " consider rolling it over to a roth ira.then after five years you can start pulling money out tax free forever.if you are a great trader and built the account up to several million it would all be tax free.you have to crunch the numbers because when you rollover you have to pay tax on the amount rolled over. you can short in an ira by useing the pro funds or rydex funds.
Well as a man with many former vises and little self control I think Nevada would be a bad choice. Myrtle Beach has a restaurant called Dick's Last Resort, the staff is paid to be mean to the customers. Personally, I think it would be a great stress reliever for me to go and be rude to some tourists after a hard day of trading. On a serious note, you are right the states will get what they want. It is too bad that it comes out of the pockets of individuals who work hard and goes toward a bunch of freebies for corporations and people who make bad choices in life.