You might have seen the suggestion that you move to lower your tax bill.
That usually tongue-in-cheek recommendation didn't make my 12 year-end tax moves list, but all y'all are welcome to join me here in no-income-tax Texas. I must warn you, however, that if you buy a home, property taxes could eat up a chunk of what you're saving by not paying state tax on your earnings.
Well, some folks in the Carolinas are about to change their tax residences without moving one stick of furniture.
And they're going to be dealing with, among other things, different and potentially confusing tax changes, too.
New Year's border, tax shift: On Jan. 1, 2017, resolution of a years-long border dispute in York and Gaston Counties along the North and South Carolina border will mean that 19 homes technically will be in another state.
Or in both of them.
Three homes now in North Carolina will end up in South Carolina. Sixteen Palmetto State homes, however, will be in the Tar Heel State when the New Year arrives.
And one woman told a local TV station that the new state line will go right through her home's master bedroom.
One of her neighbors also shared with CBS affiliate WBTV the two 2017 tax bills he's already received. They show he owes South Carolina real estate taxes on his home, but North Carolina property taxes on his backyard.
One of his concerns is that each jurisdiction has different homestead exemptions. I'm wondering if the yard alone will even be eligible for this common tax break, since there's no actual residential structure there.
Tax and other hassles: The split property issues are particularly ironic since, according to the North Carolina Geodetic Survey's web page, the program's mandate is to resurvey ambiguous sections of the state's borders and county boundaries to, in part, facilitate emergency 911 services, building inspections, school assignments and, you got it, real estate property assessments.
In addition to the new addresses and property tax concerns, the soon-to-be displaced Carolinians also will have to get new driver's licenses, change voter registration and deal with changes in health care coverage and services.
But at least the children in the relocated residences will get to stay in their current schools and be eligible for in-state college tuition for the next 10 years.
Property tax, moving tax breaks: If you are secure in your state and have a pending property tax bill, paying it early — like today unless your county or parish tax assessor/collector office is open on Saturday — could be an added itemized deduction on your 2016 federal tax return.
That's just one of the end-of-year tax moves I mentioned earlier. Check them all out and if any or all of them apply to your personal tax situation, make sure you make them in time to cut your upcoming Internal Revenue Service bill.
And when you do make the decision to actually, physically load up the van and hit the road, some of those moving costs might be tax deductible. And in this case, you don't have to itemize to write off the work-related relocation.
You also might find these items of interest:
Joe Lolli, CCIM
RE: “I must warn you, however, that if you buy a home, property taxes could eat up a chunk of what you’re saving by not paying state tax on your earnings.”
What Kay says is true, but living in a high tax state like CA, NJ, NY, MA, etc not only loads you up with high income taxes, but can also come with high property taxes as well. So before you move, do your homework on the ‘big picture’. Calculate your total tax impact and that way you can compare apples to apples… especially for retirees moving to lower tax climates.
Happy New Year!
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