Moving To A New State? 3 Reasons You Need A Tax Pro

Are you moving to a new state? With all the changes that usually accompany a big interstate move, one area of change that many Americans may not recognize is their taxes. And while seeking out professional assistance with other moving challenges, they may not realize the need to talk with a tax professional as well.

Why should you make an appointment to talk taxes now? Here are a few key changes and what they mean for you. 

1. New State Tax Rules

Although the federal tax rules are the same for all Americans, each state has its own set of taxes and tax laws that govern its own residents and others who earn income inside its borders. Each state taxes income differently and allows different deductions and exemptions. Some states have higher state income taxation rates while others, such as Washington, may not even have an income tax. 

2. New Employee Options

Most moves involve some kind of change in your job or position. Such a change warrants meeting with a tax pro to discuss all the positive and negative impacts it could have on your tax bill.

The way your taxes may change are unique to your new employment situation. If you're earning more income, you may want to look at tax planning strategies like increasing tax-deferred retirement contributions or timing bonuses. Considering independent contractor work? This decision has huge tax implications. And if your spouse plans to stop working or start working, your family taxes may be significantly different. 

Don't forget to discuss your new employment's benefit choices as well. Retirement account choices, taxable and nontaxable fringe benefits, bonus structures, stock options or profit sharing, and the means for reimbursing employee expenses can all affect your upcoming taxes. 

3. Multi-State Tax Returns

When you move to a new state, you will likely find that your first year's income tax returns are more complex. This is because income earned in each state is subject to taxes in that state — even if you earned in both states during the calendar year. You will generally need to file two state tax returns and may need to claim credits to offset potential double taxation. Most taxpayers shouldn't attempt this on their own. 

Which of these new tax situations could affect your finances the most? No matter what changes you experience as you head to a new state, utilizing tax preparation services is a good idea. Learn more by scheduling an appointment today.