if permanently move abroad

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ketanco
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if permanently move abroad

Post by ketanco » Fri Nov 25, 2016 4:39 am

i am a resident of NJ.

if i move abroad and sever all ties with NJ, and with all kinds of proofs it is clear that i live abroad and intend to live abroad, then, can i just stop filling to NJ, make one last Resident tax return to NJ, with foreign address on it, and then stop next year? or even if i live abroad forever, still forever i must continue to file resident tax return to NJ with foreign address on it until I die, because NJ will be the last state I live in the US? i am US citizen, i know i will forever file federal return even if i never return to US but i am asking about NJ (or state) here

AlohaJoe
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Re: if permanently move abroad

Post by AlohaJoe » Fri Nov 25, 2016 4:44 am

You don't have to file state taxes if you don't live there.

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kramer
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Re: if permanently move abroad

Post by kramer » Fri Nov 25, 2016 4:57 am

They will know you have left because your last filing will be a Non-Resident state tax return (since you were present for only part of the year). After that, you don't have to do anything except don't appear on their radar again and don't get snail mail there from your brokerages and banks.

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sperry8
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Re: if permanently move abroad

Post by sperry8 » Fri Nov 25, 2016 8:03 am

Just make sure you sever ALL ties with NJ. That means: no storage facility with your stuff in it, no snail mail address of any kind, do no renew your drivers license, do not have any online accounts with any NJ address in it (your banks for example). You must sever ALL ties with NJ to stop paying taxes there. So be sure you have no ties and no intent to return.
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ketanco
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Re: if permanently move abroad

Post by ketanco » Fri Nov 25, 2016 11:29 am

ok i understand all replies which make sense, and I agree

but before I read accountant responses to this question on somewhere and they were saying, that i must forever file taxes to the last state, because all US citizens must have a state, that is why we are called the United States etc...

that was why I am confused... i can not find any references to this issue.. can someone direct me to some reference may be?

CFM300
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Re: if permanently move abroad

Post by CFM300 » Fri Nov 25, 2016 12:14 pm

ketanco wrote:...before I read accountant responses to this question on somewhere and they were saying, that i must forever file taxes to the last state, because all US citizens must have a state, that is why we are called the United States etc...
If you're really worried about it, set up an address with a mail forwarding service in Florida, Texas, or another state with no income tax. After you move overseas, file your first year using that address on your 1040 and your non-resident NJ return. If you need to file Form 2555 to exclude foreign-earned income, you can put your foreign residence address on that form. The second year, put whatever address you want on your federal 1040.

To be clear, I'm saying the accountant is wrong, because if you'd last lived in a state like Florida, you don't have to file state income taxes, period.

halfnine
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Re: if permanently move abroad

Post by halfnine » Fri Nov 25, 2016 3:49 pm

sperry8 wrote:Just make sure you sever ALL ties with NJ. That means: no storage facility with your stuff in it, no snail mail address of any kind, do no renew your drivers license, do not have any online accounts with any NJ address in it (your banks for example). You must sever ALL ties with NJ to stop paying taxes there. So be sure you have no ties and no intent to return.
This.

And then get a forwarding address in a state without income tax. And if you can't easily get a foreign drivers license and need to maintain your USA drivers license move the license to that state as well.

retired recently
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Re: if permanently move abroad

Post by retired recently » Fri Nov 25, 2016 4:05 pm

Best case would be to establish residency in a no tax state, get drivers license from that state, and then leave the US. Note that I lived overseas for 13 years and still kept my drivers license and state CPA license and was assessed tax about 5 years into living abroad but was able to prove that my intent was not to return to that state, so it is possible. I was lucky to be able to use the services of a Big 4 tax professional though.

Also, some keep posting that it is very simple just leave and do not file but it is not that simple. It is based on many things so the more ties you can cut with NJ the better.

Finally, I take it you realize you are still subject to Federal taxes though there are exemptions and credits...

Niko
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Re: if permanently move abroad

Post by Niko » Sat Nov 26, 2016 2:56 am

retired recently wrote:Best case would be to establish residency in a no tax state, get drivers license from that state, and then leave the US. Note that I lived overseas for 13 years and still kept my drivers license and state CPA license and was assessed tax about 5 years into living abroad but was able to prove that my intent was not to return to that state, so it is possible. I was lucky to be able to use the services of a Big 4 tax professional though.

Also, some keep posting that it is very simple just leave and do not file but it is not that simple. It is based on many things so the more ties you can cut with NJ the better.

Finally, I take it you realize you are still subject to Federal taxes though there are exemptions and credits...
This.

I can't speak to New Jersey specifically, but many states consider you "theirs" until you do two things: (1) sever ties with that state and (2) establish domicile in another state. If you simply sever ties to one state and move overseas without establishing domicile in another state, your state tax domicile will remain. Most of the answers above focus on (1) without addressing (2).

Again, I've never looked into NJ, and tax laws vary from state to state. But this has been true in the various places I've lived.

Niko
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Re: if permanently move abroad

Post by Niko » Sat Nov 26, 2016 2:57 am

AlohaJoe wrote:You don't have to file state taxes if you don't live there.
Remind me not to get tax advice from you :)

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in_reality
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Re: if permanently move abroad

Post by in_reality » Sat Nov 26, 2016 5:26 am

sperry8 wrote:Just make sure you sever ALL ties with NJ. That means: no storage facility with your stuff in it, no snail mail address of any kind, do no renew your drivers license, do not have any online accounts with any NJ address in it (your banks for example). You must sever ALL ties with NJ to stop paying taxes there. So be sure you have no ties and no intent to return.
Radical advice there. I personally am not a radical but do as you please I guess.

I personally have a mailing address (brother's house) drivers license, own property (farmland - can't live there) and vote though the State where I was born, however, am not a resident per their definition. Look it up on the NJ tax site. Here is what I found at http://www.state.nj.us/treasury/taxation/njit24.shtml

You are a nonresident for tax purposes if:
* You did not maintain a "permanent" home in New Jersey; and
* You did maintain a "permanent" home outside of New Jersey; and
* You did not spend more than 30 days in New Jersey.

Also, you are a nonresident if:
* New Jersey was not your domicile, and you spent 183 days or less here; or
* New Jersey was not your domicile, and you spent more than 183 days here, but you did not maintain a "permanent" home here.

Note: "Domicile" has a particular legal definition. See this for NJ. http://www.state.nj.us/treasury/taxatio ... 040nri.pdf
Domicile. A domicile is any place you regard as your permanent home—the place to which you intend to return after a period of absence (as on vacation abroad, business assignment, educational leave, etc.). A person has only one domicile, although he or she may have more than one place to live. Once established, your domicile continues until you move to a new location with the intent to establish your permanent home there and to aban- don your New Jersey domicile. Moving to a new location, even for a long time, does not change your domicile if you in- tend to return to New Jersey.
A place of abode, whether inside or out- side New Jersey, is not permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose (e.g., temporary job assignment). If New Jersey is your domicile, you will be considered a resident for New Jersey tax purposes unless you meet all three conditions for nonresident status (see chart). Likewise, if New Jersey is not your domicile, you will only be consid- ered a New Jersey resident if you main- tain a permanent home and spend more than 183 days here.
So it seems even if NJ is your domicile and where you intend to return after a period of absence, you are not a tax resident if you didn't keep a permanent home there, did keep a permanent home someplace else and didn't spend more than 30 days in NJ.

Also, even if NJ is not your domicile, you are not a tax resident if you didn't keep a permanent home there and didn't spend 183 days or more there.

This is all State specific and you need to read the tax documents for your particular State to know. Not every place is California!

Advice to get a mailing address in a non-income tax State may or may not change your domicile. If you do so, have a temporary job assignment, and spend more than 30 days in NJ, I think they would consider you a tax resident in NJ.
Last edited by in_reality on Sat Nov 26, 2016 5:43 am, edited 1 time in total.

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sperry8
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Re: if permanently move abroad

Post by sperry8 » Sat Nov 26, 2016 5:40 am

in_reality wrote:
sperry8 wrote:Just make sure you sever ALL ties with NJ. That means: no storage facility with your stuff in it, no snail mail address of any kind, do no renew your drivers license, do not have any online accounts with any NJ address in it (your banks for example). You must sever ALL ties with NJ to stop paying taxes there. So be sure you have no ties and no intent to return.
Radical advice there. I personally am not a radical but do as you please I guess.

I personally have a mailing address (brother's house) drivers license, own property (farmland - can't live there) and vote though the State where I was born, however, am not a resident per their definition. Look it up on the NJ tax site. Here is what I found at http://www.state.nj.us/treasury/taxation/njit24.shtml

You are a nonresident for tax purposes if:
* You did not maintain a "permanent" home in New Jersey; and
* You did maintain a "permanent" home outside of New Jersey; and
* You did not spend more than 30 days in New Jersey.

Also, you are a nonresident if:
* New Jersey was not your domicile, and you spent 183 days or less here; or
* New Jersey was not your domicile, and you spent more than 183 days here, but you did not maintain a "permanent" home here.

Note: "Domicile" has a particular legal definition. See this for NJ. http://www.state.nj.us/treasury/taxatio ... 040nri.pdf
Domicile. A domicile is any place you regard as your permanent home—the place to which you intend to return after a period of absence (as on vacation abroad, business assignment, educational leave, etc.). A person has only one domicile, although he or she may have more than one place to live. Once established, your domicile continues until you move to a new location with the intent to establish your permanent home there and to aban- don your New Jersey domicile. Moving to a new location, even for a long time, does not change your domicile if you in- tend to return to New Jersey.
A place of abode, whether inside or out- side New Jersey, is not permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose (e.g., temporary job assignment). If New Jersey is your domicile, you will be considered a resident for New Jersey tax purposes unless you meet all three conditions for nonresident status (see chart). Likewise, if New Jersey is not your domicile, you will only be consid- ered a New Jersey resident if you main- tain a permanent home and spend more than 183 days here.
So it seems even if NJ is your domicile, you are not a tax resident if you didn't keep a permanent home there and didn't spend 183 days or more there.
If it is where you intend to return after a period of absence, you are not a tax resident if you didn't keep a permanent home there, did keep a permanent home someplace else and didn't spend more than 30 days in NJ.

This is all State specific and you need to read the tax documents for your particular State to know. Not every place is California!
Good point. My experience is from CA where all I suggested is required. Apparently NJ is waaaaaay more lax about it.
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marcos123
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Re: if permanently move abroad

Post by marcos123 » Sat Nov 26, 2016 11:50 pm

in_reality wrote:
sperry8 wrote:Just make sure you sever ALL ties with NJ. That means: no storage facility with your stuff in it, no snail mail address of any kind, do no renew your drivers license, do not have any online accounts with any NJ address in it (your banks for example). You must sever ALL ties with NJ to stop paying taxes there. So be sure you have no ties and no intent to return.
Radical advice there. I personally am not a radical but do as you please I guess.

I personally have a mailing address (brother's house) drivers license, own property (farmland - can't live there) and vote though the State where I was born, however, am not a resident per their definition. Look it up on the NJ tax site. Here is what I found at http://www.state.nj.us/treasury/taxation/njit24.shtml

You are a nonresident for tax purposes if:
* You did not maintain a "permanent" home in New Jersey; and
* You did maintain a "permanent" home outside of New Jersey; and
* You did not spend more than 30 days in New Jersey.

Also, you are a nonresident if:
* New Jersey was not your domicile, and you spent 183 days or less here; or
* New Jersey was not your domicile, and you spent more than 183 days here, but you did not maintain a "permanent" home here.

Note: "Domicile" has a particular legal definition. See this for NJ. http://www.state.nj.us/treasury/taxatio ... 040nri.pdf
Domicile. A domicile is any place you regard as your permanent home—the place to which you intend to return after a period of absence (as on vacation abroad, business assignment, educational leave, etc.). A person has only one domicile, although he or she may have more than one place to live. Once established, your domicile continues until you move to a new location with the intent to establish your permanent home there and to aban- don your New Jersey domicile. Moving to a new location, even for a long time, does not change your domicile if you in- tend to return to New Jersey.
A place of abode, whether inside or out- side New Jersey, is not permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose (e.g., temporary job assignment). If New Jersey is your domicile, you will be considered a resident for New Jersey tax purposes unless you meet all three conditions for nonresident status (see chart). Likewise, if New Jersey is not your domicile, you will only be consid- ered a New Jersey resident if you main- tain a permanent home and spend more than 183 days here.
So it seems even if NJ is your domicile and where you intend to return after a period of absence, you are not a tax resident if you didn't keep a permanent home there, did keep a permanent home someplace else and didn't spend more than 30 days in NJ.

Also, even if NJ is not your domicile, you are not a tax resident if you didn't keep a permanent home there and didn't spend 183 days or more there.

This is all State specific and you need to read the tax documents for your particular State to know. Not every place is California!

Advice to get a mailing address in a non-income tax State may or may not change your domicile. If you do so, have a temporary job assignment, and spend more than 30 days in NJ, I think they would consider you a tax resident in NJ.

I undertook a similar state-specific tax analysis before exiting (in this case, NY) direct to overseas over a decade ago.

During this time I have renewed (multiple times) my state driver's license, voted, and maintained an in-state mailing address.

There was no need to establish ties in a non-income tax state prior to moving overseas. I utilized my foreigh address as the filing address on the US tax return, and did ensure subsequent filing of Part-time and Non-resident state tax returns in my former state (as per Kramer's post above).

Notes:
- NY specifically enables non-residents to maintain driver's licenses - not all states do.

- Many states impose state tax liability for voting in state and local elections. In this case you can still vote in federal elections on your former state's ballot (president, vice president, US senator, member of the US house of representatives).

Many expat's place a high premium on maintaining a state driver's license, even if they have subsequently obtained a foreign license, in order to maintain existing US financial accounts, and in order to open new ones.

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Watty
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Re: if permanently move abroad

Post by Watty » Sun Nov 27, 2016 12:20 am

One thing to watch out for is that some financial institutions will close you account if you give the a foreign address. I don't know all the details of this but people have posted about this problem before so you may be able to find the old posts.

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