Page 25 - AT

BUSINESS Monday 16 SepteMber 2019
A25

Liz Weston: Moving to escape taxes? Make it a clean break

By LIZ WESTON in your old location? Does
Associated Press your family celebrate holi-
Breaking up can be hard to days there? Where do you
do if the other party doesn't keep your most treasured
want to let you go. People items — your photo albums,
who move out of high-tax family heirlooms, pets?
states may learn this the Where's your safe deposit
hard way — through a resi- box?
dency audit. CREATE A GOOD PAPER
States such as New York, TRAIL
California and Illinois use Creating a substantial pa-
the audits to claim that your per trail can be key to win-
recent interstate move was ning your case. Register
just a tax dodge and that to vote and get a driver's
you still owe their state in- license in your new state,
come taxes. Proving you've but don't stop there. You
actually moved and plan also should change ve-
to make the new place hicle registrations, update
your permanent home — the address where you re-
yes, the burden of proof is ceive bank statements, bills
on you in a residency audit and other mail and revise
— often requires far more your estate-planning docu-
than flashing your new ments to reflect the laws of
driver's license or spending your new state.
a certain number of days People under residency au-
outside the old state. dits typically need to prove
WHO IS MOST AT RISK where they were each day
Technically, anyone who This April 2017, file photo provided by NerdWallet shows Liz Weston, a columnist for personal fi- of the year in question,
moves out of a high-tax nance website NerdWallet.com. Klein says. Cell phone re-
state could face scrutiny, Associated Press cords — which can show
but tax experts say the resi- where you were with each
dency audit risk increases partner at Hodgson Russ in be audited if you're already high-tax state than you do text or call — can be used
if: New York. The stakes can in a low tax bracket and elsewhere, you could still by taxpayers to prove their
— You moved to a state be substantial: New York cut all ties to your old state. be considered a resident. case but also can be sub-
with a much lower tax bur- collected about $1 billion But the more you have to That can be a particular poenaed by the tax agen-
den. from residency audits from gain from a move away problem for the "migratory cy. Other potentially rich
— You still have a home or 2013 to 2017, according to from a high-tax state, the rich" who own homes in (and subpoenable) data
business ties in the old state. Monaeo, a company that more careful you should be multiple states, or even for sources include travel re-
— You moved just before sells a location-tracking about making that move, more ordinary people who cords, credit card receipts
selling a business, a bunch app for proving tax resi- tax experts say. travel a lot. Klein advises and toll collection devices,
of stock or some other valu- dency. More than half of WHAT REALLY MATTERS IN A his clients to spend at least such as E-Z Pass. You may
able asset. the 3,000 or so people au- RESIDENCY AUDIT twice as much time in their need to maintain records
— You're in a high tax dited each year lose their Many people mistakenly new home state as in their indefinitely. Although most
bracket. cases, and the average believe they need only old one. audits happen within a few
Wealthy people who move amount collected per au- spend 183 days of each Auditors look at a wide years of the last tax return
away from high-tax states dit was $144,270, Monaeo year outside their former range of factors for evi- you filed, there's often no
are virtually certain to face calculated. state to win a residency dence of where your true statute of limitations if a
a residency audit, says Auditors go where the audit, Klein says. But if you home lies. Are you still see- state finds you should have
tax attorney Mark Klein, a money is. You're unlikely to spend more days in the ing doctors and dentists filed a return but didn't.q

US budget deficit for 11 months up $169 billion over 2018

WASHINGTON (AP) — The Office is forecasting a defi- reflect higher government corporate tax rates.
U.S. government's budget cit this year of $960 billion, spending, reflecting two For this year, revenues are
deficit increased by $169 compared to a 2018 deficit budget agreements in up 3.4%, but spending is up
billion to $1.07 trillion in the of $779 billion. 2018 and this year between by 7 percent, nearly double
first 11 months of this bud- Going forward, the CBO the Trump administration the increase in revenues.
get year as spending grew sees the annual deficit top- and Congress that added Individual tax revenues
faster than tax collections. ping $1 trillion in 2020 and billions of dollars in extra have risen by 2% in the first
The Treasury Department never falling below $1 tril- spending for the military 11 months of this year com-
reported Thursday that the lion over the next decade. and domestic programs. pared to the same period
deficit with just one month The government has only In addition, Social Security in 2018 while corporate tax
left in the budget year is up recorded trillion-dollar-plus and Medicare payments revenues are down 2%.
18.8% over the same period deficits in one other period, are surging as millions Bucking this slow growth
a year ago. during the four years 2009 of baby boomers retire. are tariffs which are up $28
Budget experts project through 2012 when spend- Added to the increased billion or 73% over last year,
a surplus for September, ing went up to deal with spending is the impact of reflecting the higher tar-
which would push the total a deep recession and the the $1.5 trillion tax cut Presi- iffs Trump has imposed on
2019 deficit down slightly worst financial crisis since dent Donald Trump pushed China and other nations as
below the $1 trillion mark. the 1930s. through Congress in 2017, part of his get-tough trade
The Congressional Budget The higher deficits currently reducing individual and battles.q