If you want to avoid paying taxes in California after moving overseas, you’ll need to prove that you are no longer a resident. Remember, the burden of proof is on you.
If you have not severed all your California ties, be prepared to defend your position. California requires residents or nonresidents receiving income from a California source to pay taxes.
California’s income tax rates range from 1% to 12.3%, and the sales tax rate is 7.25% to 10.75%.
Ways to Save on California Taxes
- Get deductions from medical plans.
- Defer payment of taxes.
- Reduce expenses if self-employed.
- Use Treasury Bills, not Corporate Bonds.
- Use Municipal Bonds, not Corporate Bonds.
- Move outside the U.S. over 330 days. Exempt over $100,000 income.
- Become a non-resident. Non-residents pay taxes on California income.
- Reduce taxable gifts and estate.
- Propositions allow tax-basis transfer.
The IRS states that if you reside outside of the United States for at least 330 days out of 365, you can exempt $101,300 of taxable income from your annual taxes.