How to Plan for Nevada Tax Savings

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:

• Where you are physically present
• Where you own business interests or hold professional licenses
• Where you own a house and the relative size and value of properties
• Where you claim the homeowner’s exemption
• Where your driver’s license is issued
• Where your closest business contacts are, i.e., attorneys, accountants, banks, etc.
• Where your closest social contacts are, including clubs, churches and not for profit boards
• Where your vehicles are registered
• Where your spouse and children reside
• Where your minor children attend school and whether you paid resident or non-resident tuition
• Which state has jurisdiction in the administration of your wills and trusts
• Where you obtained a homestead exemption
• Where you maintain a safety deposit box
• Where you filed an affidavit of domicile
• Where you register to vote
• Where you claim homeowner’s exemption

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 info@ashleyquinncpas.com.

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