![\"Moving](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/01\/1768577773_783_0x0.jpg\")
<\/p>\n<\/p>\n
Fullerton, California, USA – March 20, 2021: Light shines on a bright white and orange U-Haul moving truck.<\/p>\n
getty<\/p>\n
According to a U-Haul announcement<\/a>, California tops the list for a sixth year as having the most people move out in 2025. The news that more Californians are fleeing the state<\/a> is probably not a surprise to many people. U-Haul says that Texas and Florida but there were other likely suspects too. Texas is the top U-Haul growth state. Of course, most moves are probably not about taxes, but it is hard to ignore tax disparities when comparing states. The top tax rate in the Golden State is 14.4%, though for most types of income, it is a not much better 13.3%. <\/p>\n No Capital Gain Rate<\/p>\n What\u2019s more, that 13.3% rate applies equally to ordinary income and capital gain. With the IRS, the capital gain rate is 20% for higher income taxpayers. Add the 3.8% net investment tax under the Affordable Care Act, and you have 23.8%. Say that you are about to sell your stock, large amounts of crypto, or settle a big lawsuit? It might be tempting to move first. Several proposals have been made in the past to increase California\u2019s top rate as high as 16.8%<\/a>. The 14.4% rate came when California eliminated the $145,600 wage limit on California\u2019s 1.1% employee payroll tax for State Disability Insurance (SDI). It hits high earners, with the top rate being 14.4% for those earning over $1 million.<\/p>\n Moving Seems Simple<\/p>\n Moving before big stock sales, sale of a company, or a lawsuit settlement are common, but if you aren\u2019t careful how and when you do it, you could end up with an audit from California\u2019s tough Franchise Tax Board (FTB)<\/a>. Some people have a hard time distancing themselves from California. In an audit, California\u2019s tax procedures can be tricky<\/a>. California, like the IRS, gets unlimited time to audit if you never file a tax return, and that rule catches many people who move away. It can make filing a non-resident tax return\u2014just reporting your California-source income as a non-resident\u2014a smart move.<\/p>\n Residency Audits<\/p>\n Your domicile is your true, fixed permanent home, the place where you intend to return even when you\u2019re gone. Many innocent facts might not look so innocent to California’s tax agency. For example, do you maintain a California base in a state of constant readiness for your return?<\/p>\n California looks to objective factors to determine residency, including your time in California versus time outside. Consider the size and value of your residences, and the location of the property on which you claimed the homeowner\u2019s property tax exemption.<\/p>\n Where your driver\u2019s license was issued, cars are registered, professional licenses, registration to vote all counts. So does the location of your banks, doctors, dentists, accountants, church, temple or mosque, and more. What clubs are you a member of, and where? Where do you work, and have business and social contacts? Where do you have all your mail sent?<\/p>\n As you might expect, physical presence is often the biggest issue. If you spend more than 9 months in California, you are presumed to be a resident. If you spend 6 months or less in California, you may qualify as a seasonal visitor, but only if you don\u2019t work while you are in the state and meet other tests. Yet if your job requires you to be outside the state, it usually takes 18 months to be presumed no longer a resident.<\/p>\n Timing<\/p>\n Californians often look to no-tax states like Texas, Nevada, and Florida. Some Californians flee the state before selling real estate or a business. California real estate is taxed here even if you are a non-resident. But settling a lawsuit, or selling stock and other assets after a move can make sense. Some carefully orchestrated moves away from California<\/a> can work out just fine, but timing and other details are tricky, so be careful. Check out FTB Publication 1031<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Fullerton, California, USA – March 20, 2021: Light shines on a bright white and orange U-Haul moving truck.…\n","protected":false},"author":2,"featured_media":136306,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,69438,69440,40293,39169,69442,69439,69441,19870],"class_list":{"0":"post-136305","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-california","8":"tag-california","9":"tag-california-headlines","10":"tag-california-news","11":"tag-california-tax-audit","12":"tag-california-tax-penalties","13":"tag-franchise-tax-board","14":"tag-irs-penalties","15":"tag-move-then-sell","16":"tag-residency-audit","17":"tag-state-tax-disputes","18":"tag-wealth-tax"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/136305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=136305"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/136305\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/136306"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=136305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=136305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=136305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}