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Establishing a new residence
Changing your legal state of residence is simply a matter
of spending the majority of your time in the new state
with the intent to stay there permanently or indefinitely.
But demonstrating your intent can be difficult. Here are
steps you can take to show that you plan on living in
the new state for an extended period of time:
- File a declaration or affidavit of
domicile.
- Get a driver’s license and license
plates in the new state, and relinquish your license and plates in
the old state.
- Register to vote — and vote — there.
- Pay property taxes.
- File your federal tax returns with
the IRS center closest to it.
- File resident income tax returns in
the new state (if applicable) and nonresident income tax returns in
the old state.
- File for a homestead exemption.
- Open new bank accounts and a safety
deposit box — and move the contents of your old box there.
- Change your mailing address, such as
on your passport and other important documents.
- Join organizations in the new state
and cancel memberships in organizations in the old state.
Retirement plan contribution limits
|
Retirement
plan type |
2004 limit |
2004 limit
(age 50 or older) |
2005 limit |
2005 limit
(age 50 or older) |
|
Traditional and
Roth IRAs |
$3,000 |
$3,500 |
$4,000 |
$4,500 |
|
401(k)s,
403(b)s, 457s1 |
$13,000 |
$16,000 |
$14,000 |
$18,000 |
|
SIMPLEs1 |
$9,000 |
$10,500 |
$10,000 |
$12,000 |
|
SEP IRAs |
25%2
of eligible compensation, up to $41,000 |
n/a |
25%2
of eligible compensation, up to $41,0003 |
n/a |
|
Keoghs
(profit-sharing) |
25%2
of eligible compensation, up to $41,000 |
n/a |
25%2
of eligible compensation, up to $41,0003 |
n/a |
1Not
including employer contributions.
2For a
sole proprietor, 20% of self-employment income.
3Adjusted
annually for inflation in $1,000 increments.
|
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5 tax tips to end
the year with more cheer
|
| As Dec. 31 nears, it’s
not too late for businesses to save on 2004 taxes and
spread holiday cheer at the same time. Options include
giving gifts to employees, making charitable donations,
combining business with holiday travel, deferring income
and accelerating purchases. Although this is a time of
year when company coffers rapidly empty, a little
advance planning can put cash back into business owners’
pockets.
Read More
|
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State death taxes
may hit you where you live
|
|
The federal credit for state estate tax
(also known as the state death tax credit) has been
gradually decreasing and will be eliminated in 2005, and
many states’ death taxes will disappear with it. To
replace the lost revenue, many states whose taxes were
linked to the federal tax are “decoupling” from the
federal credit — changing their laws to no longer be
tied to it — and establishing their own estate or
inheritance taxes. Because no two states’ laws are
alike, estate planning is becoming even more
complicated. This article looks at how to plan for this
change and the effect of residency on estate plans.
Read More
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Saving for
retirement
Contribute early and often
|
|
With people living longer, their
dollars must go further than ever before. Contributing
the maximum to a traditional or Roth IRA or to a 401(k)
or another employer-sponsored plan is one way to help
ensure individuals are saving enough for their golden
years. This article discusses strategies, such as timing
contributions to grow retirement savings and minimize
taxes.
Read More |
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