Buy a small condo/house in Nevada. Run the numbers will most likely be cheaper than paying California...

 

Huh? This statement would be correct if you live in the same state as your base, and/or more than 50% of your flying is within that state. By chance are you OAK or MDW based?

Otherwise, tax law seems to state pretty clearly that you owe income tax to the state where you have permanent residence.

 

I hear several years ago some pilots from another airline based in PHL won a legal suite against the IRS. They stated they only worked in the state from the time the reported for work until the left 3,000' which is federal airspace not owned by the state of Pennsylvania or the City of Philadelphia. I don't know how true the story is but you can always become a mail order minister and say your home is a church. All your pay check is deposited to the church account which you draw from for living expenses. Then convince your friends (other pilots) to join your church and give donations to your church which are tax deductible. The church would then buy all members of the church gift cards for gas, food, movies, etc as a show of appreciation for their attendance to his church in the exact amount of their donations.

 

MDW... my fear is that if I had LAX for my base and the state pushed the issue of my residency, then I'd find myself in trouble. If somebody asked me, I'd honestly have to say I'm a CA resident. As I do consider myself a resident of IL right now.

I don't mind paying my fair share. But not that much, it's INSANE. I don't live in a prestigious area, but it is gated, and I have a very respectable 2000 sq ft home on a golf course. You get very far out of that realm, and it's freaking Iraq! Only less safe! But my oh my, the weather, and the absence of smog in southern OC, with it's blue skies and beautiful mountains. I snag a hand full of nights sleeping in my own bed because their are 5 airports that make an Uber ride feasible, depending on the time of day.

I'm not a legal eagle, nor am I the wolf of Wall Street. Such complicated issues give me a headache.

 

KalifoRnia is a whole different animal when it comes to collecting taxes and their laws are written to get any and all taxes they think they are owed.

 

CA state income tax is really not as bad as some people make it out to be. If you are married, the first $537,500 of your income is taxed at a marginal tax rate of 9.3%. However, California's income tax is highly progressive. The first $105,224 is taxed at an effective tax rate of only 4.4%. That's actually below average for many states. Even if you make 250k a year, your effective tax rate is 7.2% (Before any write-off's) For comparison, 43 out of 50 states charge state income tax, and the average effective state income tax rate is 5%.

State income tax is deductible on your federal taxes if you itemize. So if you're in a ~30% federal tax bracket, you'll get to write-off 30% of that 7.2% you paid in state taxes on your federal tax return. So your effective state tax rate would be 5%. Throw in some other federal write-offs (mortgage interest, charity, etc...), and your true effective state tax rate gets into the mid 4% range, depending on your situation, for making 250k.

California's property tax rate is also significantly lower than other states (Roughly 1% of the home value, and can not increase more than 2% annually). You'll find that owning property in California is also quite profitable.

People get all worked up over CA state income tax, but ~4.5% of your income if you make 250k is a very small price to pay for living in CA. It's worth it for the weather, scenery, things to do, beaches, mountains, wineries, you name it.

 

When you say, buy a small condo in NV, I hope you mean to live there, not just for the tax advantages even though you live in CA... MN came after NWA pilots hard a few years back for essentially the same thing. Living in MN, but had a small places in TN/FL/AK. Were claiming that they weren't MN residents.

 

Sorry dude - state and local income tax deduction is now capped at $10k/yr for your federal return.

 

Also failed to mention the $0.14/gal gas tax on our already astronomical gas prices, and the ever increasing cost to register vehicles. $450 for my 11 year old truck this year. Up by about $100 from last year.

 

Where did you get your info from? It’s all wrong.