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May 27, 2012

US Expatriates Can Avoid Paying State Income Taxes with Proper Planning

Many US expats wish to maintain a US mailing address or home in the US , or US state drivers license, etc. but do not want to risk having to pay any state income taxes (there is no Federal requirement that you maintain a state tax domicile if you live and work outside of the US).   You should check the tax laws in your state of residency to see what difficulties you may encounter trying to stop paying state income taxes when you do chose to live and work abroad. Many states have laws which  attempt to keep their residents paying state income taxes (even though an ex resident may have moved their residence abroad) while other states make it easy to stop paying state tax.   California, Virginia, New Mexico and a few other states are those that make it difficult  to stop paying state income tax when you change your domicile to one outside of the US.

One easy solution you can use to attempt to avoid paying state income taxes when living and working abroad, is to move your US address, tax domicile, voter registration, drivers licenses, etc.  a state with no personal income taxes. The US states which do not have personal individual income taxes. Those include:

AlaskaNew HampshireTennessee
FloridaSouth DakotaWashington
NevadaTexasWyoming
 


 

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