Does Moving Make Cents?
When you’re born, you begin life in a home state that is certainly not of your choosing. (In my particular case, it was the state of New Jersey.) If you moved to a different state during your childhood, the relocation decision was your parents’ call, not yours. They undoubtedly had their reasons, which you were too young to comprehend. You simply said goodbye to your friends, hopped in the car, and off you went.
But as you grow older, go to school, start a career and begin a family, creating and staying within a budget becomes critical. You start scrutinizing your pay stubs and notice the huge disparity between your gross and net income. You examine all of the line-item withholdings and discover that most of them are taxes. Very high taxes. Ever-increasing taxes. It begins to dawn on you how much more money you could take home, if you could just reduce or eliminate some of those taxes. Eventually, often out of frustration, the discussions and research begin. After a while, with facts weighed and a destination selected, you pack up the family and head out. This time it is your call!
This scenario is not unique; it is shared by millions of Americans who seek out new places to raise their families. They find a place that offers a better quality of life, good schools, and the opportunity to keep more of what they earned. Personally, I chose Florida. Florida is one of nine states with no personal income tax, so you know there will be significant savings right there. But in today’s world of technology, programs exist to actually calculate the savings you can realize by moving between states. You can quickly learn how much you can save by moving fromPoint A to Point B, without ever leaving the kitchen table.
One such program is the Laffer Center State Relocation Tax Calculator. Taking the scenario I outlined above, if a one-income family of four, making $75,000 per year, were to relocate from the Newark, New Jersey, area to the Miami metro area, they could realize a savings of just over $2,000 per year in taxes. That would certainly provide for a well-deserved vacation, money for savings, and the latest toy for the kids – in other words, that’s a smart move on your part.