Tips for Your Taxes After a Long-Distance Move

When you are making a move across states, there are so many things you need to consider and be prepared for. One major thing that a lot of people forget to think about is their taxes. What should you do when you need to file your taxes after a big move across states? Where do you file them? Here are a few tips to help make this tax season a little easier.

Income tax

Every state has different income tax rates. California has the highest rate of income tax at 13.3% and some states don’t have any income tax. When you move from one state to another and work in both states during a fiscal year, you will have to pay income tax and file tax returns for each state. Usually, when this happens you give the dates that you lived in each state on your tax return documents. So make sure to keep track of when you moved to the new state. This is called a part-year return because you lived in each place for only part of the year.

Property tax

Property tax is paid when you own a property. So, if you are moving from California to Idaho and own a house in California, you will still be paying property taxes on your house in California to the local government. If you sell the house then the buyers will take on any future property taxes. Then when you decide to buy property in Idaho, you would pay the property taxes from the day that the property is in your name. Generally, property taxes are paid twice a year and the money goes to the local government for them to allocate to your community. If you buy your house in between those two payments, then the tax will be prorated and part of your fee for the new house will pay the seller back for the tax they already paid.

Things to consider as a small business owner

As a small business owner, you may need to consider whether you need to get a new Employer Identification Number (EIN). This is a number assigned to a business by the IRS for federal tax purposes. You would only need a new EIN if you start a new business in your new state or if you create a new LLC in your new state.

You will need to know how business tax laws differ from your old state to your new state. Each state has different tax laws and will require you to have the proper paperwork and pay the correct amount of taxes. Contact the State Revenue Department to get more information and pay your taxes in your new state.

Things to consider as an independent contractor

As an independent contractor, you may need to consider any state that you have lived in during the year that you are filing taxes for. If you have moved a lot or have spent a lot of time traveling, it may be difficult to figure out where you should claim your home. If this is the case you may want to find a tax consultant.

If you have been in the same place for a long time and are moving for the first time that year, then you will likely need to file taxes for both places, similar to someone who is considered an employee. Be sure to check your state’s guidelines, and consult a professional when you need assistance.

Disclaimer: We are not legal or tax professionals. This is a general guide to help bring awareness to items you might need when moving across state lines. For expert guidance, please consult your attorney or accountant.