Tax Time Again

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Thats one of the reasons I drive older, not so nice, cars. The main reason being I work six to eight months a year, and do not want to pay the high depreciation and carrying costs on a car that I cannot even drive most of the year.

[QUOTE=tugsailor;155057]Thats one of the reasons I drive older, not so nice, cars. The main reason being I work six to eight months a year, and do not want to pay the high depreciation and carrying costs on a car that I cannot even drive most of the year.[/QUOTE]

I got the car before deciding to return to sea…

I thought about selling it, and the motorcycle, but the former is a nice solid car and the motorcycle is therapy.

[QUOTE=tugsailor;155000]Since you are working overseas, why don’t you “move” overseas and pay no state tax? I don’t know Virginia law, but in most states as long as you do the things that are necessary to establish residence somewhere else, and spend less than 180 days in state, you are not subject to state tax. You can still have a “seasonal home” in the state.

Just make sure you briefly move to a state with no tax, get a driver’s license, and register to vote, before you move overseas. Make sure you register as an expat with the US Embassy in your new country of residence. It would probably be a good idea to move your bank accounts out of the state where you will no longer be paying taxes. In general, do everything you can to reduce your footprint in the high tax state. Obviously, if you have a wife and kids living in the high tax state, you will not be able to avoid paying the state tax.[/QUOTE]

I rarely post but in this case I feel it’s important to get a bit more details out there regarding the above advice. Much of the advice is correct; making your footprint as small as possible, moving your bank accounts out of the state, having a wife and kid in your “real” home state however…

Let’s clarify exactly what we are really talking about here. A mariner that truly moves out of the country or a mariner that is taking some actions to make it appear that way, while actually spending the bulk of his/her off time in their real home state. While a mariner that truly lives overseas, say Thailand or the Philippines as many union sailors I’ve worked with do, in my opinion shouldn’t have to pay a state tax and I’m sure plenty don’t. But there are four states, known as the terrible four; Virginia, California, New Mexico and South Carolina that for some crazy reason don’t agree. They will pursue you to the ends of the earth claiming you as their resident. So…in that case, I guess after proving that you do actually not set foot in their state at all could actually prevail in legally avoiding their tax, they just won’t make it easy. btw most of those union sailors living abroad pay their state tax because they have to supply as U.S. residence to maintain their health care benefits.

Now on to the real issue at hand, claiming you live abroad or in a tax free state but really spending the majority of your time at your “real” home. If your real home is in one of the states mentioned above, good luck with that…No matter how many Nevada addresses you supply them if you merely breathe some California or Virginia air a couple times a year they will come after you and claim you as their resident. That is for sure.

First off the address myth. There are a ton of mail forwarding services in Nevada and the states know all about them. If you simply google that address you’ll find the forwarding business pop up, if you try and use that address to obtain credit, your credit bureau will get flagged as high risk. Next the less than 6 month myth. That applies to a person that actually has a residence in two states, say tax free Washington and high tax California. If they can document that the majority of their time is spent at their Washington resident they will prevail in avoiding the California tax. Let’s say a mariner really lives in California but buys a home in Las Vegas, four hours drive away. They regularly stay at that home for a few days almost every time their off the boat and get Nevada drivers licenses, register to vote in Clark county (NV), etc. They’re on the boat 8 months a years and off only 4 months a year. California will send you a letter requesting a meeting, not a fun letter to get…They will examine your spending habits (via credit card and bank statements. If that happens you better have the vast majority of those gasoline, restaurant, movies, etc. in Nevada. Crazy as it seems the burden is on you, the taxpayer to prove you are not a California resident. If you don’t get that letter after plying this charade for several years the amount of taxes, penalties and interest you’ll owe will probably financially ruin you at worst or at best be a real bummer.

Lastly, there are strategies to avoid a states tax but it’s not as easy as registering to vote and getting an address. It’s not even as easy as buying a residence in a tax free state. It will take some time and effort and some hassle but if your making DPO pay on a drill rig or masters pay on an OSV and paying state tax, it may be worth it.

Now it’s time to fire up my Turbo tax and finish my own returns!

Hey have you used Ruth before ? I’m reading that she charges 525.00 for a merchant mariners return ? Does this sound right to anyone ??

I had just the opposite experience working with Crowley. At the time I was living in Florida and working on the West Coast for a bit. Florida (a no income tax state, of course) did not need any, but since I was working out of Pier 9 in San Francisco (and I was only there on a couple of occasions), I had California taxes taken out AND had to pay them. . . Of course then there was the time I was working in Louisiana and my checks came out of Florida with NO tax taken out. . . and Louisiana found out. . .oops. . .