Playing With Fire With State Income Tax

Here’s a slap for all those snowbirds from the Northeast who are playing with fire when it comes to state income tax.

A few months back, I did a segment about how several northeastern states are losing a lot of residents to ones that charge no income tax.

I also talked about how the tax-charging states are using very creative ways to find out if these folks meet residency requirements in their new home states. Usually, it takes six months and a day to establish residency.

The states are checking things like club memberships, address changes and utility bills – and yes, they even interview neighbors to find out if their neighbors have been in the area.

Well, Connecticut may have caught up with an acquaintance of mine. He’s been claiming Florida residency for years, but he has never – not once – met the residency requirement of six months and a day.

He received a letter from the state of Connecticut informing him that he owed taxes for 2017. He promptly called the number on the letter and said that he is a Florida resident and doesn’t owe any taxes.

The response was just a little scary: “We’ll look into this further and get back to you.”

I hope, for his sake, they look only at 2017!

He’s confident it’s a mistake. I’m not.

After 19 years, now it makes a mistake? Not after what I have been reading about Connecticut and a few other states. This is no mistake; my friend’s only chance is if he gets lucky and it goes away.

If luck isn’t on his side, he could owe back taxes on many years. The real killer, though, wouldn’t be the taxes, but the penalty and interest. Those could cost him a fortune – that is if he isn’t charged with income tax evasion.

I’m not a tax expert or a lawyer, so I don’t know the particulars about how states handle this kind of thing, but my gut says my buddy has a real problem.

Oh, and the really bad news… His mail is now being forwarded back to his Connecticut address, even though he didn’t enter an address change with the post office.

This is something a lot of people play with and fail to take seriously, but it could turn your retirement into a trip down poverty lane.

These states aren’t just sitting back and watching their tax base move away. They will get the money.

I expect a whole lot of people will be getting letters from Connecticut and other northeastern states. Good luck!

Good investing,

Steve

Perfect Stock Caught Trading Under Secret Name... [sponsor]
It trades under a secret name... for just $3. But thanks to a developing situation involving Donald Trump, America's No. 1 tech company and $10 billion... this may soon be the most talked-about stock in America. Find out more about the "secret stock" here.

Source: Wealthy Retirement