Moving is one of the easiest ways to slash your tax bill.
In the modern economy, freelancing, and running a home business are growing trends. If you run a largely internet based business or service, then all you need is an internet connection and you can work.
This opens up the opportunity to move wherever you want.
Florida, Texas, Washington, Nevada, South Dakota, Wyoming, and Alaska have no state income tax nor taxes on dividends and investment income. New Hampshire and Tennessee also have no state income tax but do tax dividends and interest. However, Tennessee is phasing out its investment taxes by 2022.
Alaska also has no state sales tax. Wyoming has no corporate income tax.
The cool thing is that these states are distributed pretty evenly across the country, north and south, east and west. So you likely don’t have to go that far from family and friends in order to take advantage of the lower taxes.
But if you don’t mind a big move, you can choose between beaches and igloos, mountains and deserts, temperate rainforests, and the good old south.
And once you move into a good statewide tax jurisdiction, you can set to work on finding a friendly local tax jurisdiction.
Wyoming is ranked 8th among the states with the lowest property taxes as a percentage of home value. Its average property tax is only .61% of a home’s value.
Unfortunately, New Hampshire at 2.1% and Texas at 1.9% are among the ten states with the highest property taxes. Of course, these are averages and will vary from town to town. Usually the more rural you get, the lower the price of property, and therefore the lower the property taxes.
Aside from taxes, finding a place with a low cost of living is another smart move for online workers. This can help you gain more financial freedom, and put more money into savings and investments.
Tennessee has the 7th lowest cost of living in the U.S. and Texas the 11th. Wyoming and South Dakota have a lower cost of living than 60% and 56% of other states, respectively.
Alaska, New Hampshire, and Washington are among the 15 most expensive states.
If you are not tied to a location for work, your income from online can go a lot further.
Remote Working for a Company
But it’s not just the self-employed that can cut the commute. Gallup has found that the ability to work remote plays a major role when looking for employment. Demand is there, and flexible companies will be able to attract better talent.
While it’s great to get the team together in person every now and then, most work doesn’t need to be done at an office. Employees can be judged by meeting deadlines and the quality of work, instead of logging office hours.
When it comes to working for a company, fewer people work 100% of the time from home. So some proximity is still required for work.
But an hour commute is easier to deal with once a week, versus every single day. And this kind of commute gives you access to cheaper homes with lower property taxes, as you move outside populated areas.
Where are People Moving OUT of?
Some states are just not friendly environments. And when remote workers get fed up and leave, they take their income with them.
Everyone knows New Jersey is the worst state in the USA. It is ranked #2 for states that people are fleeing. Illinois is #1, probably from all the people running from stray bullets in Chicago.
Massachusetts made the top ten list, which is where I moved to Florida from. New York and Connecticut fill the #3 and 4 spots for states that people are leaving.
Do you think it is a coincidence that all those states have high taxes and restrictive government? Let’s just hope the fleeing voters don’t ruin the good states.