Califoia Sales Tax Deduction
12-23-2017, 07:38 PM
#61
Nordschleife Master
Originally Posted by Nick
For those considering prepaying taxes be careful. The AMT may take the payment away.
12-23-2017, 07:48 PM
#62
12-23-2017, 07:55 PM
#63
12-23-2017, 09:04 PM
#64
12-23-2017, 09:22 PM
#65
12-23-2017, 09:26 PM
#66
Not a matter of 'claiming' anything. For some, it's not that hard to actually legally make their primary residence in a state without income tax and still spend a considerable amount of time in California.
12-23-2017, 10:14 PM
#67
Rennlist Member
Joe, not sure about that. CA has a AMT. You could lose it in your State return because the CA AMT is similar to the Federal AMT.
12-23-2017, 10:20 PM
#68
Race Director
How does the FTB determine whether a visit has a permanent purpose versus a temporary one? It applies the "Closest Connection Test." This refers the comparing contacts a person has with various states during a taxable year: the one with the "closest contacts" is the state of legal residence. For the FTB, this literally means counting all the California contacts a person has and comparing that number with the non-California contacts. Of course, some contacts simply weigh more than others. A job or real estate ownership indicates a closer tie than merely enjoying a round of golf at a country club or attending a music festival. The weightiest factors for residency are:
- Ownership or lease of real estate.
- Business interests or employment.
- Schools used by children.
- Membership in clubs.
- Bank accounts or safety deposit boxes.
- Use of professional services such as accountants, doctors, dentists and lawyers.
- Automobile registration and license.
- Family ties and social life.
- Appearance in telephone or social directories.
- Location of personal belongings such as clothing, family photo albums or kitchenware.
- Jury duty.
12-23-2017, 10:34 PM
#69
Don’t think California will make avoiding state income tax easy. Here are the details...
How does the FTB determine whether a visit has a permanent purpose versus a temporary one? It applies the "Closest Connection Test." This refers the comparing contacts a person has with various states during a taxable year: the one with the "closest contacts" is the state of legal residence. For the FTB, this literally means counting all the California contacts a person has and comparing that number with the non-California contacts. Of course, some contacts simply weigh more than others. A job or real estate ownership indicates a closer tie than merely enjoying a round of golf at a country club or attending a music festival. The weightiest factors for residency are:
- Ownership or lease of real estate.
- Business interests or employment.
- Schools used by children.
- Membership in clubs.
- Bank accounts or safety deposit boxes.
- Use of professional services such as accountants, doctors, dentists and lawyers.
- Automobile registration and license.
- Family ties and social life.
- Appearance in telephone or social directories.
- Location of personal belongings such as clothing, family photo albums or kitchenware.
- Jury duty.
12-23-2017, 10:48 PM
#70
Race Director
And its very easy to do almost every one of those things in Nevada and still spend much of the year in California. It's very easy to do, legally, if one wants to go to the trouble. It's just not worth the cost for the average citizen. For the wealthy, it certainly is, and it's not that hard to legally do it.
12-23-2017, 10:56 PM
#71
Instructor
For Federal purposes you can deduct state and local income taxes on Schedule A. The Federal AMT will eventually kick in and phase out the Schedule A deductions, thereby eliminating the state and local tax deduction. CA does have an AMT calculation but it isn't affected by the amount you pay in state taxes (just as you don't deduct the amount you pay in federal taxes on your federal return).
12-24-2017, 01:20 AM
#72
RL Community Team
Rennlist Member
Rennlist Member
I know this much.
I will never take tax advice on Rennlist.
I will never take tax advice on Rennlist.
12-24-2017, 02:30 AM
#73
Rennlist Member
For Federal purposes you can deduct state and local income taxes on Schedule A. The Federal AMT will eventually kick in and phase out the Schedule A deductions, thereby eliminating the state and local tax deduction. CA does have an AMT calculation but it isn't affected by the amount you pay in state taxes (just as you don't deduct the amount you pay in federal taxes on your federal return).
12-24-2017, 02:46 AM
#74
Instructor
I'm not a tax professional - but I did stay at a Holiday Inn Express last night!
12-24-2017, 11:14 AM
#75
Rennlist Member
If you find yourself in Fed AMT - you could consider a Roth conversion, to generate some income and only pay the 28% AMT on that income. May not be great timing from a market perspective though.