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Old 02-14-2007, 10:45 AM   #1
dsprik
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Tax return question - residency?

Since our last tax return filing, we have moved out of our apartment, then we stayed at a summer CG in N. Mich before leaving for FL in Sept of this year. We will move back to the N. MI CG for the summer on April 30. We plan on repeating this pattern for the near future, not counting our excursions out west and other areas of interest for a couple of weeks at a time.

We consider ourselves MI residents (we expect to fulfill the 6 mos residency in MI every year), but we plan on spending 5 months or so in FL most years. Not sure what, if any, effect this has on our Fed and St tax returns. Fed asks right up front, on my TurboTax online program, what our residency was as of Dec 31, 2006.

Our summer CG address is not active in the winter and the PO returns all mail (not forward) sent to anyone at the CG after they close for the season. Otherwise, I would use this address as our MI address. We of course don't have a permanent address now.

What address should we use? Any suggestions/input would be appreciated.

*On Edit~ I need to clarify the Fed's residency question... "State of Residence on December 31, 2006:" After I re-read this, I assume this means, "What state did you live for more than 6 months in 2006." Right? Not "Where are you living as of December 31, 2006?"
 
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Old 02-14-2007, 11:02 AM   #2
ols1932
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Dave,
I believe that you are still legally residents of Michigan. Unless you establish a permanent residency in another state (SD, TX, FL, etc.) you must file your taxes in Michigan. If you're undecided then it may behoove you to talk to a tax lawyer. The first year we went full time, we left Iowa in November. When we filed our taxes, we were residents of Texas as of December 31, 2000 but we still were required, by law, to file taxes as residents of Iowa for 11/12 of a year. After that, our taxes were filed from our Texas residency address.

Orv
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Old 02-14-2007, 11:11 AM   #3
msmoonsatx
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One of the primary reasons for determining your state of residency is for determining any state income taxes that you may owe. Regardless of your state of residency, if you work in a state that has a state income tax, you are liable for taxes on the income you earn in that state. I am a CPA but I am not familiar with the requirements of each particular state. The best advice I can give is that if there is a potential question of liability, to discuss it with someone familiar with the tax laws of the state in question.

Mark
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Old 02-14-2007, 12:46 PM   #4
SKOOBDO
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You indicated "Fed asks right up front, on my TurboTax online program, what our residency was as of Dec 31, 2006" As you may know, the federal tax return calculations are standard nationwide and have no impact on what state you live in, however, for your state return use the one where your legal residency is. And of course, if you're working part-time etc...file part-time residency in the state where you're working. There are folks that travel all the time and there's no way they can file in each state, so use your legal residency state for state taxes. Federal doesn't matter, and you can use any address you want to on your tax returns including P O Box numbers. I've been doing it for years so I make sure I get my next years returns at the address I want. There were folks that worked in Louisanna and Texas for months over 6 months helping out, and how many of them this year filed "Louisanna" state income tax? Many were paid by employers from other states as direct deposits and did not take "Louisana" state income tax out of them. They just took for instance "Michigan" tax out as though they were still living and working there. Hope this helps you some.

On Edit: There is the "State Sales Use Tax" on Federal Returns if you want to itemize your "sales tax" instead of "state income tax", and you would have to use the State Charts from the IRS.
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Old 02-14-2007, 01:45 PM   #5
dsprik
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I finished my returns. Fortunately, Cheryl has income from FL, which does not require a State return. So we should be good to go.

I did not see where to file for a part time residency? I just claimed MI as I am registered to vote there.
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Old 02-14-2007, 01:53 PM   #6
msmoonsatx
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Are you residents of Florida or Michigan? If you only reside in the state for part of the year or are a non resident with income from the state, they will generally have a special form for your tax return. For Michigan, this is a schedule NR for part year and non residents.

Mark
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Old 02-14-2007, 02:39 PM   #7
sreigle
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It is your state of legal residency as of that date, not where you happen to be staying. That said, keep in mind some states consider you a resident for tax purposes if you are in the state longer than xxx consecutive days. However, what they don't know....

Dave, unless you have taken steps to become a legal Florida resident, you are still a resident of Michigan. You are simply visiting Florida for an extended period with no intent to become a resident. See my comment above, however.

You MAY have to report Cheryl's Florida income to Michigan and they MAY or MAY NOT want taxes on it, especially since you paid no income tax on it in Florida. That depends on the state. I know in Kansas they want to know about what you earned in Kansas AND what you earned in other states while a Kansas resident. There is a form to make sure you don't pay double taxes. However, if I recall, if Kansas tax is higher, Kansas will collect the difference from you (me), or did when I was a Kansas resident working in Kansas City, MO. That was back in 1983, however.
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Old 02-14-2007, 03:23 PM   #8
stiles watson
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No matter where I travel or how long I visit, my domicile is at a street address in Texas. That is my residence of record. That is my tax filing address. When we leave Texas for Branson, we may not return to Texas for up to a year, but my mail comes to that address to be forwarded. I do my banking online relative to that address.

Since I have been in Hong Kong for the past 18 months with foreign income, I could not do that. When I get back to Texas in 14 days (but who is counting), I will again take up that residence and travel.
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Old 02-14-2007, 04:18 PM   #9
dsprik
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I have to go back and see if I missed the MI request for income from another state... Cheryl and I plan on working at Disney part time during the winter months. The rush of walking around Disney for free just hasn't wore off yet.
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Old 02-15-2007, 02:26 AM   #10
jsmitfl
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We use to live in Michigan but worked in Indiana. When we filed taxes we recieved our money back from Indiana plus the county tax we had to pay for working there. Then we had to send Michigan their share.
Dave as long as you still have Mich. drivers license I think your good to go. I know the law is if you are here more than 30 days and are working, your suppose to change everything over. BUT stay tight lipped and you won't have any problems.
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Old 02-15-2007, 02:32 AM   #11
ols1932
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Quote:
quote:Originally posted by dsprik

I finished my returns. Fortunately, Cheryl has income from FL, which does not require a State return. So we should be good to go.

I did not see where to file for a part time residency? I just claimed MI as I am registered to vote there.
You've got it right Dave. The place you are registered to vote is considered your place of residency. You probably should check on Cheryl's income in FL. You may have to file an amended return. Nothing great to worry a lot about though.

Orv
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Old 02-15-2007, 04:16 AM   #12
FulltimeFollies
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These posts bring up a question. Why , if you fulltime, do you still choose Michigan as a resident state? Did I miss that somewhere?
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Old 02-15-2007, 04:41 AM   #13
patodonn
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You consider yourselves as Michigan residents, and, I'm sure, so does Michigan, because they are getting your $$...taxes and fees. It will remain that way until you take steps to change it. It has nothing to do with where you spend your time. As long as you keep your MI drivers license, vehicle registrations, etc, you are "Michigan-er".

Tax-wise, I don't know about Michigan, but CA wants their cut, no matter where/how you earned it, unless some other State gets to it first, through mandatory filing/withholding. All that is one big reason (out of many others) why I "left" CA, as a full timer, to become a SD resident.

Re miling services, aside from convenience while traveling, that's why folks set up an "address" in SD, TX, etc...to establish their "residency" in that particular State. I may pay a small amount for the convenience, but that is a WAY bigger savings on taxes and "hassel". That mailing address, plus new drivers licenses, vehicle registrations, voting registration, maybe even a small "local" bank account takes you away from all those pernicious State tax gatherers in MI, NY, CA, etc.

Can you continue to own any property in the original State? Sure, but consult a tax guy and be careful how you show it. It can be a "vacation home" or "rental" or some other designation. Again, talk to a tax guy...

As an aside, Nancy had a temp job recall twice, both times back to CA. We have had to file a "CA Non Resident or Part Time Resident" return for them, and pay taxes on that $$, since it was earned in CA, even though we aren't "residents"...we were physically present while earning the $$. Of course, none of that applies if you are an illegal. One more reason we left...
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Old 02-15-2007, 12:30 PM   #14
Leaseit
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Dave,
I think i would take Marks advice and spend the $$$ to visit a Tax Lawer or CPA that knows Michigan Tax law. There are issues that may come back to bite you if your not careful. Last thing i want is to spend the afternoon with some nice government auditer.
Just some of the trap things are Drivers License (As Mark pointed out), do you own property, how about a house, then you get into Homestead Exemptions that may apply and how long you spend at that location, where are you registered to vote, do you get income as in wages in the State.
Issues you may want to avoid now rather than later.
Randy
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Old 02-15-2007, 01:31 PM   #15
sreigle
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DAve, you're getting some really excellent advice. If I may add an observation, PJ mentioned possibly setting up a small checking account in your new state of residency. That might be a way to help be sure there is no question. However, we did not do that. We maintain our checking account in Kansas. That's our only tie to the state (other than family) since we sold the house and became South Dakota residents. We've had no problems because of it. What I'm saying is you probably wouldn't need to move your banking unless you want to.

As fulltimers with no real estate anywhere, you're wasting a lot of money (probably thousands per year) by maintaining your residency in Michigan and paying those taxes. Unless, of course, you want to remain Michigan residents for whatever reason.
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Old 02-15-2007, 02:24 PM   #16
dsprik
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My situation is unusual. I am on Workers Comp, awaiting my SS Disability appeal hearing. Since, in MI, WC is not taxable (I was on it for the entire year of 2006), we only had to claim Cheryl's waitress income. Not enough to keep us from a full refund.

I did not change state residency last year as I didn't want to rock the boat while on WC and while awaiting SSDI approval. Switching state residency may have muddied the waters and raised some eyebrows. I cannot afford that right now. We will look into changing residency at a later time. Probably SD.

MI return did require me to report my WC, even though I received no form, and was told I would not, from WC. Even though I typed in the full WC amount received last year, the MI return absorbed it and I never saw it again through the process or at the end. I'm not sure what that was all about...
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Old 02-16-2007, 02:03 AM   #17
sreigle
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Dave, your explanation makes a lot of sense. I apologize for suggesting you were making a mistake. And good luck in getting things settled.
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Old 02-16-2007, 02:40 AM   #18
Bob & Lee
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When we sold our home in Kansas they would not let me be a resident inless I was there or owned property unable to just keep a POB so we were no longer considered a Kansas resident. we established our residence in Rapid City SD and have an address and drivers licence there. last year we spent in Colorado in a rented park we own no property here. We both worked and paid colorado state tax and just filed Non resident and got back about half what they collected. have had no problem so far.

Bob
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Old 02-17-2007, 12:40 PM   #19
dsprik
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I sure didn't take it that way, Steve. Next year may be a whole new ball game. Lots of financial tornadoes in 2007 also. There will be a lump sum settlement with WC - nontaxable. There may be another negotiated settlement with a mortgage company that could net a sizeable, taxable lump sum. Also, SSDI back benefits this spring could range between $15K to $30K (taxable, I believe). I will also be substitute teaching in both Mich and FL after SSDI approval.

I will be scrambling to try to keep the IRS from having a field day with me. I will seek professional tax advice on this one...
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Old 02-17-2007, 01:16 PM   #20
exav8tr
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Dave, Your SSDI is taxable as ordinary income. The SSA will pay you in a lump sum as they did me. You have to either pay tax on it during the year or on your 1040 at the end of the year. I won a 4 year settlement and had a rather large payment, but put 25% of that in bank for taxes. Will see soon if I witheld enough or not...
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