CALIFORNIA EXPAT TAX OBLIGATIONS

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A resident of California is regarded as anyone in the state for other than a temporary or transitory purpose. A Californian resident also includes anyone domiciled in California who is outside of the state for a temporary or transitory purpose.

 With an appetisingly high state tax of 13.3% on top of the IRS’s federal taxes, many are left desperate to find a legitimate route out of their Californian tax obligations.

One of the most important factors in determining your Californian Tax Obligations is identifying your residency status in California.

California considers several factors when determining an individual’s residency status. California defines residency as ‘…the place where you have the closest connections.’ Identifying where your ‘closest’ connections are to is done through considering the following:

  • Amount of time you spend in California versus amount of time you spend outside California
  • Location of your spouse/RDP and children
  • Location of your principal residence
  • State that issued your driver’s license
  • State where your vehicles are registered
  • State in which you maintain your professional licenses
  • State in which you are registered to vote
  • Location of the banks where you maintain accounts
  • The origination point of your financial transactions
  • Location of your medical professionals and other healthcare providers (doctors, dentists etc.), accountants, and attorneys
  • Location of your social ties, such as your place of worship, professional associations, or social and country clubs of which you are a member
  • Location of your real estate property and investments
  • Permanence of your work assignments in California

The burden is on you to prove that you’re not a resident. Your tax records should include proof that you severed your strongest ties to California (as listed above) to prove you’re not a resident. If you have not severed all your California ties, the state can argue you are still a resident, therefore you will face the state tax.

CONTACT US FOR MORE EXPERT ADVICE ON TAX FOR CALIFORNIA EXPATS

alistair bambridge