Avoiding triggering california residency audit when visiting frequently
I'm going to be a Washington resident soon and my employer is in Washington. My girlfriend is starting a MS degree in LA though and I would like to spend as much time with her in Cali as possible. To clarify, this means I am spending most of the work weeks in Washington and flying down on Friday for the weekend. However, I don't want to incur California resident taxes, esp. as I have significant capital gains (high 6 figures - hopefully, still remaining) to cash next year. I have heard that the tax board (FTB) is super aggressive in looking for people to tax. How do I avoid catching the eye of sauron? - I will likely bump up against the 50% time in Cali limit (have heard it listed as 75% time elsewhere - not sure which is true). Does tax board proactively look at flights in and out to flag people for an Audit? Or do they get credit card transaction data from companies to proactively note days people transacted in Cali? - I was going to help her rent a place bigger/nicer than what she could get as a student sole applicant so we'd have space, but I think having a name on lease would automatically place me on a list of people to check for any possible income - right? Is there any other option - like subletting or getting an AirBnB? - I also will probably move to Cali formally in 2023 (after cashing out the capital gains). Will this retroactively trigger an audit to see if I was there the year before? Curious if anyone has dealt with this. Edit: To clarify, I'm spending <50% of my time in California. Most of it will be on weekends ie not doing work. I would be fine paying taxes for my work time in California as a NON-RESIDENT and filing a return to do so. I just don't want that to trigger an audit to make me a RESIDENT and have everything taxed, especially capital gains. #california
You are screwed. Even if they don’t notice for a year they will retroactively audit you when you return. Facts and circumstances are not on your side. The FTB has been known to subpoena your phone records, credit card records, and in some cases your neighbors and co-workers. They are ruthless.
What would an audit look like that would reveal this?
Your cell phone pinging AT&T/Verizon towers in California And yes, the CA FTB checks this.
Breakup
Lol. How can I evade taxes? Let me ask blind
I do not know about how they get their data but legally, you are liable for paying CA tax for any of the days you work from CA. In terms of retroactive thing, I personally got a letter from them asking about a previous tax year because I moved to CA and when I filed for, say 2019 taxes in 2020, I had moved to CA in 2020 and was using a CA address but had not filed a 2019 return with CA (in my case I didn’t need to and replied as much) but yes, it is likely they look back after you move. If it is like the IRS, there is no statute of limitation there (statute of limitation starts after a return is duly filed).
I am fine paying taxes as a non-resident for any work I do while in California. The question is more around how do I avoid being classified a resident and have ALL my income taxed, and having all my capital gains taxed. Also, I almost feel like filing a non-resident tax claim might proactively trigger an audit. Edit, also does this retroactive check happen to everyone above a certain tax bracket? I moved to California when I was younger and paid like $80k and they never asked me to verify I wasn't a resident the previous year.
I can’t comment on how they pick and choose when to do an audit (I can only tell you about my case). The “non resident” classification is really up to a question of intent and whether your stay in CA is temporary and transitory. If you stay more than 9 months, you are assumed to be a resident per FTB. If less than 9 months, it gets in the gray zone in your case it seems since if you intend to make CA your home and your significant other is already here, they could make a case that you are more strongly connected to CA than to WA in which case you would be a resident. If you are unsure, you should consult a tax attorney. If FTB thinks you may be a resident, they will come after you.
Definitely don’t put your name on a lease in California
Yes you are doomed
Definitely risky if you plan on spending half your time in California. Why don’t you fly your girlfriend out to your place every other weekend instead?
Ya wanna spend majority of time living in CA and avoiding CA taxes? Well then buddy, you gotta live off the radar. 1) drive from WA to CA. No flights. Or bike. Or ride a horse. 2) get a cell phone number under your gf’s name and use that while in CA. 3) spend cash only in CA 4) don’t have your name on anything in CA (no rental leases, no utilities, nada) 5) have a permanent address in WA 6) work laptop is VPN’d into WA daily 7) have no friends and no coworkers know you’re in CA.
OP is trying to skirt tax payments they might actually owe, not publish journalism or something
Is this for real?
Get a job in CA?
Get a girlfriend who lives in Nevada