Mailing vs. Residential address impact
Moderator: Mark T Serbinski CA CPA
Mailing vs. Residential address impact
Getting into a new job, I am relocating to another state (TN) where there is no state income tax. And I don't have any income this year in the present residential state (NC) but my wife had employment income. Her fedral and state income taxes are deducted every pay period. Upon relocation we are offered temporary corporate housing that will last till end of this year. Now, where we live will be our residential address (new to TN) but we are still keeping the current residential address as permanent mailing address (in NC). My question is regarding tax implication while filling the tax return for 2005 - do we have to pay the NC tax for the income earned after we relocate?
By keeping your 'residence' in NC, you are subjecting yourself to NC state tax on all income.
Why don't you simply change your mailing address to your temp address? Or get a PO box in TN and redirect your mail there? Your other choice is to redirect your mail to a friend's house until you buy in TN. I would do <i>anything </i> except what you propose.
I'm quite sure that NC is aware that TN doesn't have income tax and is already wary of anyone 'claiming' to have moved from NC to TN. By keeping the NC address, you are nailing yourself with an unneccesary, potentially costly, and completely avoidable tie to NC.
<i>nelsona non grata... and non pro</i>
P.S. If your wife is keeping her NC job, she will still pay NC tax regardless of where she lives, so that is not an issue. The issue is any other income either of you earn after leaving NC.
Why don't you simply change your mailing address to your temp address? Or get a PO box in TN and redirect your mail there? Your other choice is to redirect your mail to a friend's house until you buy in TN. I would do <i>anything </i> except what you propose.
I'm quite sure that NC is aware that TN doesn't have income tax and is already wary of anyone 'claiming' to have moved from NC to TN. By keeping the NC address, you are nailing yourself with an unneccesary, potentially costly, and completely avoidable tie to NC.
<i>nelsona non grata... and non pro</i>
P.S. If your wife is keeping her NC job, she will still pay NC tax regardless of where she lives, so that is not an issue. The issue is any other income either of you earn after leaving NC.
Thanks Nelsona for quick response. The problem is I am moving to a totally new area where I don't know anyone - well my wife and I took that challenge because of attractive new job offer. Otherwise I could have used someone's address. I like the tip of using a PO Box, but isn't that considered as temp. address as anyone can operate that. Also, as per the state laws, the driver's license etc. cannot be issued based on a PO Box address. My wife will be working in NC for a month or so (on weekends though) so do you think it will be a good idea to fill out "Married but filling seperately" tax return for year 2005?
Are you giving up your NC residence or not?
If yes, then how will you keep getting mail there?
If not, then the whole issue is moot, as you will still be living in NC, paying NC tax.
By the way, when I said forward the mail to a friend, I meant someone in NC. This would still be better than leaving the address in your old home.
Getting a PO box doesn't make the PO box your address, it makes it the place to which your mail is forwarded, that's all; your address would be the temp housing, which would be used at the DMV without problem.
I'm suggesting the PO only for mail delivery, and as a more 'proper' indication that you've moved than your idea of not forwarding your mail.
Married filing separately doesn't change anything, and says nothing about your living arrangements.
<i>nelsona non grata... and non pro</i>
If yes, then how will you keep getting mail there?
If not, then the whole issue is moot, as you will still be living in NC, paying NC tax.
By the way, when I said forward the mail to a friend, I meant someone in NC. This would still be better than leaving the address in your old home.
Getting a PO box doesn't make the PO box your address, it makes it the place to which your mail is forwarded, that's all; your address would be the temp housing, which would be used at the DMV without problem.
I'm suggesting the PO only for mail delivery, and as a more 'proper' indication that you've moved than your idea of not forwarding your mail.
Married filing separately doesn't change anything, and says nothing about your living arrangements.
<i>nelsona non grata... and non pro</i>
I am giving up my residence in NC, infact moving with my stuff only, as currently living at in-law's house without paying. Getting mail at NC address is not a problem as there are lot of friends and relatives. Ok, just to avoid confusion let me ask straight based on what I am planning to do:
1) What address I should be showing when completing the W-4 form to the TN employer so that I can avoid any NC state tax?
2) What address I should be showing when completing the I-9 form?
I am planning to keep the mailing address of NC for timebeing and later change it to TN permanent address (Once I establish and have a permanent home). Or getting a PO Box but in that case will not be able to get a TN-DL.
1) What address I should be showing when completing the W-4 form to the TN employer so that I can avoid any NC state tax?
2) What address I should be showing when completing the I-9 form?
I am planning to keep the mailing address of NC for timebeing and later change it to TN permanent address (Once I establish and have a permanent home). Or getting a PO Box but in that case will not be able to get a TN-DL.
You should be putting your temp housing address.
From what you are saying, and as I have been assuming all along, you are at great risk of being considered resident of NC, so it is up to you, now, to see to it that you are giving as many ties as possible away.
The simplest first step to to take in order to show this move <u>would be to forward your mail to an address in TN</u>. Forward it to work. forward it to PO box, forward it to your temp housing I don't care.
If you were moving between 2 states that have similar tax, it wouldn't matter, but because you are movind to a tax-free state, and to a NEIGHBOURING tax-free state at that, you can be sure that you merely 'saying' that you moved to NC DOR, because your took a couple of CDs and some sheets to TN, just isn't going to fly, especially if you don't have proof of taking the simplest step of forwarding your mail.
Another point: you seem to fail to see that your temporary housing IS A REAL ADDRESS, and can be used for all sorts of legal purposes, including registering your car, DL... anything. It's not the same as staying in a hotel.
Put your temp housing address on your I-9 and W-4; there is no requirement for the employer to keep the address up to date on these forms.
<i>nelsona non grata... and non pro</i>
From what you are saying, and as I have been assuming all along, you are at great risk of being considered resident of NC, so it is up to you, now, to see to it that you are giving as many ties as possible away.
The simplest first step to to take in order to show this move <u>would be to forward your mail to an address in TN</u>. Forward it to work. forward it to PO box, forward it to your temp housing I don't care.
If you were moving between 2 states that have similar tax, it wouldn't matter, but because you are movind to a tax-free state, and to a NEIGHBOURING tax-free state at that, you can be sure that you merely 'saying' that you moved to NC DOR, because your took a couple of CDs and some sheets to TN, just isn't going to fly, especially if you don't have proof of taking the simplest step of forwarding your mail.
Another point: you seem to fail to see that your temporary housing IS A REAL ADDRESS, and can be used for all sorts of legal purposes, including registering your car, DL... anything. It's not the same as staying in a hotel.
Put your temp housing address on your I-9 and W-4; there is no requirement for the employer to keep the address up to date on these forms.
<i>nelsona non grata... and non pro</i>
As a consultant, mainly be working from home or at customer site. I managed to contact someone who mentioned that the office (which is very small and for some sales related activities only) where mail comes in PO box too, so that option is out of equation now. But I am going to land on the idea to show the temp. housing address and keep changing as I change my residence, I know its hassle but atleast can save myself from NC govnmt. I never knew that the state governments are that strict in determining one's status.
Thanks for the advice Nelsona.
Thanks for the advice Nelsona.