As the titles says, if I am working in the USA and living in the PI, with no residence or ties to Guam any longer (or any other US state), will I be paying federal taxes only?
Do you own property in any US state? From what you say, no residence or ties, I assume no, if you own no property, then you will not be required to pay any state taxes. If you have stayed out of the USA for 330 consecutive days from January 1st, then you get I believe the first $94k tax free,
Depends on the last state you had connections with. Will you still have a state issued driver’s license & does your employer do something with any particular state for unemployment & insurance benefits. Usually health insurance is regulated through a state & not the fed. IMO & from my experiences running from the tax man when I was younger, get permanent residence status in a state that doesn’t have state income tax by getting a DL & voter registration card. Cut all ties from any state that you used to live in that has a state income tax & spend more than 11 months of the year outside of the US, preferably by working for a foreign subsidiary of a US company. I would even consider changing your US phone number to the income tax free state area code. Don’t give your tax documents to any accountant unless they are fully aware & have experience with expats working/living outside of the US for over 11 months a year. Don’t cheat Uncle Sam, pay your taxes throughout the year & let him refund what you overpaid.
You sure about that part?
That is excellent advice. I had a terrible experience with the tax man many years ago. Unless you can afford to pay a LOT of money to a tax attorney it’s not worth taking a chance. Only the wealthy can afford not to pay taxes. If you’re not rich there is no due process, you’re guilty until you can afford to prove yourself innocent.
Thanks for the info, guys!
Being that I work US-flagged deep sea for a California based company, I know that I will pay Federal taxes, and I am not trying to get out of that.
I am mainly wondering if legitimately having my residence be on-record (on my Federal taxes?) as in the Philippines (with no other residence or ties to any US state) will keep California’s grubby fingers out of my paycheck… Seems like it should, but I will consult a CPA that specializes in mariners’ taxes.
I’m all ears for any further thoughts. Thanks again!
California = you pay. They’re one of the few states that will get their state taxes no matter what.
It is based on residency and not where the company is located.
FWIW, if I absolutely need to go the route of establishing permanent residency in another part of the USA, I may as well opt for Saipan… their 9% ‘Federal’ income tax looks tasty!
Not truly 9%, its based on a rebate.
Income Earned From zero to $20,000 = 90% tax rebate
Income Earned From $20,000.01 to $100,000 = 70% tax rebate
Income Earned Above $100,000 = 50% tax rebate
I had a problem with the state of Louisiana several years ago & contacted a tax lawyer in Baton Rouge. He told me to pay them whatever they wanted because they were going to get it regardless & then contract him to get it back, which he would. He said no tax judge would side against a possible tax cheat against his state. I started making payments & it worked. After I got it half paid some nice lady looked at my case, said I didn’t need to pay & refunded my money. The lady was an angel, I’ll see her in heaven one day because she had to be a saint.
The California Franchise Tax Board will illegally chase out of state Mariners for state taxes for years.
The trick is to force the employer to comply with federal law by NOT withholding state tax in the first place. Your union should help you with that.
Your union should also negotiate with the employer to process its union member Mariner payroll in a no tax state, like Washington. If California does not know that you are earning income from a California company ( I’m guessing Matson), then they will not try to tax you.
If California taxes are withheld from your paycheck, you’ll probably never get them back. The cost of legal fees to attempt to compel California to do so would probably exceed the amount of the taxes.
If you don’t have the California taxes withheld, California will file tax liens against you. If you don’t have any property in California there is not much they can do to force a resident of a distant state to pay.
It would be a good idea to avoid travel to California.
This is great info, thank you. Yes, I work Matson (and also Patriot).
I travel to California to join the Matson vessels, as my union only does turnovers there, and not Honolulu (unfortunately).
I do have family there, so if I hypothetically had an illegal CA state tax lien against me, what would / could happen if I want to visit family there?
California could charge you with tax evasion and issue a warrant for your arrest. If that were to happen, and you have an encounter with the police over a broken taillight or something, you could be arrested and taken to jail.
A lot of things get really complicated when you have no US residency. For example, (AFAIK) without a US address you can’t have bank accounts with US banks or invest with US brokerages. (I was recently looking into moving to Costa Rica full time and that’s one of the issues.) The solution is to hire a service from a state like Texas that gives you an address and receives your mail.
So say I end up staying on Guam.
Guam would obviously want me paying state tax here, right? So how does that work with CA?
Would I pay state tax twice? I can’t imagine that being legal, but I could damn well be wrong…
Yes it is legal. If you work in one state but live in another you usually have to file returns for both states. In your case, working for Matson does not mean you owe CA taxes unless you have established residency there.
Got it, thanks for the insight!
If that’s the case, why do many of the other officers I work with deliberately live in states with no income tax? Honest question…
As far as paying state tax in other than your home state remember the “Amtrak Law” applies to mariners. According to that law you only pay state tax to your resident state.