Ashley Quinn is a Nevada firm of CPAs and financial professionals with particular experience in tax planning aspects of relocation from California to Nevada.
Nevada remains one of seven states with no state income tax, which makes it even more attractive for relocation. For those coming from California, the income tax savings can amount to 13% of your taxable income. To obtain Nevada residency, an individual must make Nevada his principal place of residence, or his primary home.
So according to Ashley Quinn, what are some of the most important steps to plan for tax savings in Nevada?
Residency is a question of fact and is normally considered when the taxpayer maintains their closest connections within that state. The “Close Connection Test” considers various factors which will determine as w hole which state a taxpayer has their closest ties or connections within the taxable year. Below is a non-exhaustive list of the factors considered for the test:
Tax Savings for Trusts
Trusts with Nevada fiduciaries can have significant tax advantages. Non-California source income distributed to non-California resident beneficiaries or retained and taxable in the trust, can escape California taxation.
Tax Savings for Individuals
Escape state taxation of income, except for income arising from sources within another taxable state. Even taxpayers who may continue to be required to “source” one or more items of their income to a taxable state may still enjoy a significant reduction in their overall tax burden.
Tax Savings for Corporations
States generally tax corporate business income based on corporation’s level of activity within and outside that state. Shifting as least part of the corporation’s business activities to Nevada will generally result in a reduction of state income tax. It could also eliminate state income taxation of the corporation’s non-business income.
Thank you to our partners at Ashley Quinn for providing all of this great information to our readers! For a complimentary initial consultation regarding the potential tax advantages of Nevada residency, please contact them at firstname.lastname@example.org.
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