[quote=PatentGuy]There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.
Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.[/quote]
Interesting idea. Actually, how do you establish residency in another state? Does it necessarily require one to move? Not so much as I plan on doing it (yet), just curious.
Just for giggles, from Nevada:
“Unless otherwise required by a specific statute, NRS 10.155 provides that the legal residence of a
person in Nevada is that place where the person has been physically present within the State during the
period for which residency is claimed. Legal residence starts on the day that such actual physical
presence begins. If a person leaves the jurisdiction of his or
her residence with the intention, in good
faith, of returning without delay and continuing his or her residence, the time of absence is not
considered in determining the fact of residence.”
