How can a retired California expat avoid state taxes

It seems the best way is the most time consuming.  To establish residence in a different state you'll likely need to move out of CA for 183 days, establish a new home, mailing address, get a new drivers license, register to vote, etc. in a new state.

https://www.investopedia.com/tax-residency-rules-by-state-5114689

At the bottom of that article is a chart summarizing the rules by state.

That said, you may be ok just moving overseas under their safe harbor rules provided you do not derive income in California. According to this:

https://www.ustaxhelp.com/have-file-california-taxes-if-i-live-abroad/#:~:text=Basically%2C%20if%20you%20were%20a,have%20received%20while%20living%20elsewhere.

If you're outside the state for 546 consecutive days you don't need to file state taxes. 

Here is a pretty thorough article:

https://brighttax.com/blog/california-state-taxes-for-us-expats/

05/17/24 and establishing a domicile in a tax free state which is time consuming?         -@Robert60

Good morning, @Robert60.  You're doing the time-consuming part by moving to Brazil; dropping your state residence can jut be one more item on your checklist for that.

I was living in Illinois and paying Illinois income tax.  Once I sold my home there, my Illinois-based lawyer (who also does my taxes) was satisfied that I  was no longer an Illinois resident for tax purposes.   So was my financial advisor, who stopped automatically deducting state tax from any capital gains. My US mailing address is at my mail forwarder's in Texas, a state with no income tax.  Mail forwarders congregate in Texas and other no income tax states for just that reason.   

Illinois allows former residents to continue to vote absentee without tax implications, as long as they don't establish a domicile in another state; you'll need to check California's law if you want to keep voting.

I have no property in and derive no income from any state where I formerly lived.  If you plan to maintain those ties to California, that will complicate matters.  @BRBC's articles sound like a good start for planning that scenario. 

    Soon I'll be leaving California retiring to Brazil and want to stop paying state taxes. Is the only way to do so is cutting all ties to the state
and establishing a domicile in a tax free state which is time consuming? Robert
   

    -@Robert60

@Robert60, I have been planning this for a while now.  The solution is simple - have a) no income AND  b) no physical asset under your name in the state. 

If you have a large estate and income, I would recommend consulting a lawyer and a knowledgeable accountant / financial advisor as they may be able to suggest financial and legal instruments that might work for you. 

If you are planning on doing a clean start in Brazil in DIY style, @abthree's plan sounds like a very pragmatic approach and is very feasible.

However, if your estate value is in between, then you may have to make a few decisions related to taxes a few years before your planned move.  A discussion with a financial advisor and a tax accountant who has knowledge on the matter would be important here. You should be able to confirm that details provided by @BRBC would work for you with those professionals.

Good luck.

I think @abthree is close to my situation. I paid no taxes last year because I had no income besides my social security (my inheritance did not count in R.I. / MD.) and that did not rise above reporting level. I am not familiar with California taxes, but I agree that it really depends more on what income or property you have. I think you and a good tax person should be able to work it out to at least determine what you have in California that is taxable and decide based on those options.

Roddie in Retirement

Ca has one of the highest tax rates. Ill have SS, company pension and an annuity as income and some 401k. Sadly, most tax accts are not experts with expat taxes. Ill have to find a reasonable expat tax acct as im not going to pay CA what I figure to be about 6k yearly not even living there. Thanks for the reply. Robert

@BRBC I looked at the Safe Harbor prior and this option seemed better than moving out of state for 6 months (zero tax state) but Safe Harbor seemed to refer to employment and not retirement.  Amazing that International Living magazine I subscribed to for years never covered much these issues. Thanks for those links. Robert

Here is the link that should answer all the questions about California tax residency:

https://www.ftb.ca.gov/file/personal/re … index.html

Seems like what I thought. Need to leave CA for 6 months to get domicile in Nevada. What a waste of time.

@Robert60 Yeah, but the most surprising thing for me reading through that document was that China has a tax treaty with the US, but Brazil doesn't.  WTF? 

I'll just transfer funds into my bank acct as needed and been doing that for years. Never have worked in Brazil buy Yes there should be a tax treaty. Brazil with Lula just reinstated the tourist Visa which must hurt them financially but do it out of recipricosity

Brazil with Lula just reinstated the tourist Visa which must hurt them financially but do it out of recipricosity
    -@Robert60

The e-visa requirement has been pushed back to April 2025.  So you don't need a visa to go to Brazil until then... Note that this requirement has been pushed back 3 times already....

@Pablo888 that's great to know.