Pay Less on Taxes and Other Expenditures

Saturday, 13 November 2010 – By Bernie

Lets talk a bit about saving some “MONEY” that you are now giving away when you go to work and punch that time clock, register your vehicle or have to do an annual vehicle inspection. If you are working “Under The Table”, then some of this does not apply. There is nothing in this article about saving money on Social Security Taxes, or how to stop paying them. Perhaps I will do an article on that later.

I am not talking about “Tax Evasion” which is “Illegal”, but “Tax Avoidance”, which is legal and many people practice. Do you really think the rich pay their fair share of taxes? Or the full amount of Social Security Taxes due? Nope, I know from experience how to reduce, or totally eliminate those taxes. In any case, this short little article will apply to most of us, so lets get started.

There are 9 preferred states to live in to do this. I always try to make one of these states my “Home Base”, but I do not always succeed. So what are these 9 states? Glad you asked. Here they are, in alphabetical order.

1) Alaska
2) Florida
3) Nevada
4) New Hampshire
5) South Dakota
6) Tennessee
7) Texas
8) Washington
9) Wyoming

So, what is the attraction with these 9 states? None of them collect “State Income Tax!” For most of us, that would be a small amount. However, lets just for example say that we had to pay $1,000 a year in state income tax, which is pretty much us just taking $1,000 out of our pocket and giving our state a $1,000 “TIP” just for allowing us to stay there and pay property tax, utility bills and what ever else they can do to drain us of our hard earned dollars. Hum, I just don’t like giving out those kinds of tips.

So, instead of that, in this example, that same $1,000 could have been used to improve my standards of living, like paying for my transmission that was just rebuilt and I would have change left over, or that $1000 would have bought the new tires I just put on my van, again, with change left over. Getting the point here? If we are traveling around anyway, we just as well get the state that benefits us the most.

So which state do you prefer? I have lived in all but Alaska, New Hampshire, South Dakota and Washington. Right now, I am based out of NV with my driving job. I take time off in Vegas or I take it off in Phoenix. I let them know ahead of time which place I want to go, and most of the time it works out.

I should have done Flagstaff this past summer, but it is getting a bit cold there now. Point is, it does not matter where I take my time off. It matters to the Govt., the state and IRS only when it come to taxes. They don’t care where you live, as long as you are forking over your hard earned cash on time.

I also like having only 1 license plate, as I want to reserve the front bumper for me. I normally don’t have anything there, but when I find something worth displaying, then the front bumper is open and ready for me, and not the state.

To make it 100% legal, you need your own address in the state of your choice where you can get mail. The police don’t like seeing your drivers license from one state and your vehicle license plates and insurance from another. I ran into this when I lived in TX and had my vehicle license plates and insurance from NM. You know, as long as you have the address that is on your documentation, then there should not be an issue.

However, the police think that there is something funny with this setup, as they do not understand our lifestyle, and a lot of people were crying that some people are going to NM because the plates and insurance were cheaper, and there was no inspection like TX. Such cry babies where having a hissy fit. Hey, I am doing what I have to to stop “Over Paying”. TX gave me no state income taxes and NM gave me the rest. Mission accomplished.

OK, there is no problem getting your new residency all set up, easily, legally and inexpensively. Lets list a few places that I have done some research on, or have experienced in the past first hand.

ALASKA – To cold and I don’t know anything about it as far as vehicle inspections. I do know that I want to go during the summer really soon, preferably with a 4 wheel drive. What most people don’t want you to know is that if you are a resident there, you do get a check every year. This check is for profit sharing. Profit from what? Oil wells.

So, from what I heard, it is in the area of $700 to $800 per year (depending on supply and demand) that you get, that could pay for the gas up there for a nice vacation. I think this is per person, not per house hold. If that is of interest, then you may want to be a “Resident” there, even though you may only visit in the summer. I have no idea what land sells for, and I doubt if I ever look. It is way to cold most of the time and to far away for my liking. Hey, in the winter you could probable walk to Russia, if that is of any interest.

FLORIDA – This is a good state, if you can put up with the humidity and hurricanes. The first time you register your vehicle there, better get a second mortgage. It is rather expensive, but what isn’t anymore.

I lived in Panama City for 1 year, and part time in Miami. I have never registered any vehicles there, as I had all them based out of TN at that time. There is also no vehicle/smog inspections like some states, but the insurance rates are in the top 10 as the “Most Expensive States.”

If FL is the state for you, here are a couple of links where you can get mail, vehicle registrations and a drivers license. This would be a legal setup for all of those, and you would have FL residency with the right to vote. I do not remember FL having 2 license plates for your vehicle.

Pensacola http://www.goodsammail.com

Pensacola http://www.amhomebase.com

Pensacola http://www.rvmailservice.com

Pompano Beach http://www.mailboxforwarding.com/index.php

If you truly want an inexpensive residence in FL, check out this link.

http://www.escapees.com/erpu.asp

You must be an Escapees member to use their mail service, but the cost to buy in my be worth it to have a place to call home. The yearly rates are really reasonable.

TGO Resort http://www.tgoresort.com

OK, TGO is not so inexpensive anymore. When I first looked at this place, the lots were in the $20,000 range. Now they are about 5 times that. However, FL will give you good protection against real estate ownership, and this is a pretty carefree lifestyle once you are in and set up.

For those living in FL, FL has excellent protection for real estate. So, if you own a home there, it is almost impossible for someone to sue you and get it, or any part as many people go there before they file bankruptcy so their home is protected from creditors. FL and TX will protect your home like no other, so this may be something to keep in mind when you do decide to finally settle down in one place.

Myself, I think TX is a bit better, but I sure don’t want to go through bankruptcy or any other law suites to find out first hand. However, if you do not pay your property taxes, your outta there. There is no protection in any state for that. Again, the govt. will do what they want, so just as well learn how to play their game.

NEVADA – Right now, I have my registrations, drivers license and insurance based out of IN. However, since this is an article about taxes and other expenditures, my home base for paying taxes is NV. I will probably never get my drivers license or register a vehicle there, but here is the place that will work for all of that. I have met Eric, the owner, as well as the 2 employees who work there, Darcy and Kevin. They are really nice and friendly.

Here is that link. MAIL LINK

Since we a talking about Mail Link, I use the “Virtual Mailbox” option. With this set up, it is only $10 per month. Hey, pretty cheap rent! The nice thing about this is that if you have an email set up with them, then when you get a piece of mail to your box, you will also get an email from Eric letting you know what it is and what day it arrived. WOW!!

No more guessing on when you get something or calling in to find out. Also, they will forward the mail to you when ever you want, or you can tell them to save it till later, or toss it. You can also pick up your mail in person during business hours. I really like this set up, and I pick mine up in person.

NV has state inspections and 2 license plates. However, I guess that would be a small price to pay instead of paying State Income Taxes. NV is also the only state in the nation that does not exchange tax information with the IRS! If you don’t think that is powerful, then read it again and let it really soak in. However, they are in the top 10 “Most Expensive States” for insurance.

NEW HAMPSHIRE: This state is located way to far in the North East for me. When I was there for a bit one summer, the weather was wonderful, the people were friendly and hospitable, and most places did not have an A/C. WOW!!

It was really nice that day, and I can see where an A/C may not be need to often, but a heater would be a necessity in the winter. To cold for me up there at that time, so NH is not a consideration for a home base for me. NH and ME are on the list of places to go, see and visit in the summer time, as I want some of that fresh Maine Lobster right off the boat.

SOUTH DAKOTA – This is the state of my choice. Yes, to cold during the winter, but I am not going to be there at that time. Summer time would be great plus the big bike rally goes on there in the fall at Sturgis! I have never been to the rally, but I will soon.

It is easy to get a drivers license or vehicle registrations there, and they are one of the cheapest states in the nation for insurance. Oh, did I mention that they do not collect “State Income Tax” or have “Vehicle Inspections” or the silly little extra thing called “Wheel Tax!” 🙂 There are 3 money saving advantages right there, not to mention the state has plenty of places to park and enjoy.

Actually, you can get your vehicle registered there with out ever visiting the state right through the mail. Pretty nice feature. The requirement to get a drivers license is that you must stay at least one night where you pay to sleep. That can be a camp ground, motel, a B & B, and not sure what all. As long as you have a receipt showing that you stayed “ONE” night shows that you are serious about becoming a SD resident.

You will also need a place for a permanent, physical address that will be put on your drivers license. Probably not a good idea to use the campground or motel where you slept the night before. Here are a couple of links with plenty of reading about some different benefits and will provide you a Physical Address to make it all happen.

They have 2 license plates for your auto, but they don’t have State Income Taxes and State Inspections and they are one of the states with the lowest Insurance Rates in the entire USA. Hey SD, count me in!

Rapid City http://www.americas-mailbox.com – My Pick – A Christian Owned Company

Madison http://mydakotaaddress.com

Sioux Falls http://www.alternativeresources.net

Sioux Falls http://www.yourbestaddress.com

Emery http://www.myhomeaddressinc.com

TENNESSEE – I had this one for years in Chattanooga. I got it right out of truck driving school in 1994. I enjoyed living there in TN, even though I was hardly there. My rent was less than $15.00 per month! OK, it was a really small place. I rented a box from “Mail Boxes, ETC.”.

This worked for many years, then the state of TN figured out what I, and probably many others were doing, and would not renew my vehicle registrations. I told them that I drove a truck, and I don’t have a “Physical” address like they require, as this address IS my physical address.

They wanted to know where I lived as well as proof like an electric bill, water bill, phone or what ever. I told them I lived in a truck, and everyday I stay in a different city and state. Did not matter, they were not going to renew my vehicle registrations. So, I dropped my mail box there and I have never renewed the registration on my pickup, and I put my van registration in IN since that is where I was headed anyway.

It was in TX, and I paid the high priced insurance and the $26.50 or so for the inspection long enough to get it out of the state legally. Actually, since TX has 2 license plates, the TX plate is still on the front of the van.

Mail Boxes, ETC. may still work in different states, but it did not work for me anymore in TN. Actually, I think they are now called the “UPS Store.” I am guessing that I closed that address/box somewhere around 2003. Since that time, I have either had my vehicles registered in TX or IN. I prefer IN out of those 2 states, as IN does not have a state inspection which cost another $25. – $30 or so, plus IN does not do a finger print like TX on your drivers license and IN only has 1 license plate. Oh, and did I mention that IN is in the top 10 states with the “Lowest Cost” insurance?

Here is a place in Cleveland, TN just up the road from Chattanooga where I “Lived.” I did not know about it at the time, or I could have just moved all my things up there.

Cleveland http://www.mailcallusa.info/

Memphis http://www.incparadise.net/tn/memphis-mail-forwarding.htm

TN does not do vehicle/smog inspections, and they only have 1 plate.

TEXAS – At one time in 1991 or so, I was using a place out of Lubbock, TX for an address. It was not for vehicle registrations or a drivers license, and now I am not even sure why I had it. However, if you don’t mind the vehicle inspections and perhaps a little higher rates for insurance, TX may be your answer. When I was stationed at Fort Hood in Killeen, TX, I had all of my registrations and drivers license based out of IN. I know the property and sales taxes are a bit more in Texas then states in the Midwest.

I lived in El Paso for a total of 12 years, and never had a vehicle registered there until the last year before I moved back to IN. Insurance was high as well. When I registered my vehicles there before I started driving a truck and headed to TN, I went next door to NM and got a Mail Boxes, Etc. box and had my registrations and insurance there. Sometimes that brought a few questions, since I had a TX drivers license, but it worked back then, which was around 1989 – 1994.

When I left TX in 2002 I did have a huge mobile home, and I am not sure what the taxes were, as I did not own the ground. I know I complained about it, as it was terrible high for not owning the ground that it was sitting on. The mobile home was considered “Personal Property”, which may have made the taxes even higher than owning a home with the dirt. My property taxes in IN are less than $15 per month on a home & business that occupies about 3,500 sq ft. WOW!!! What a difference. Oh, did I mention that the insurance rates are pretty good in IN as well.

Here are a few links to help you out with your research.

If you truly want an inexpensive residence in TX, check out this link.

Escapees Club http://www.escapees.com

WASHINGTON – They do not collect State Income Tax, and I do not know about vehicle inspections or license plates. However, I do want to get up and see Seattle, Bellingham and some of the other coastal areas at a “Snails Pace” and with out the restrictions I have when I am in that big ole truck. However, there seems to be a lot of over cast, non sun shine days with a lot of rain. If that is your thing, then get on up there.

WYOMING – Another great state. I lived in Laramie for 6 months. Plenty of places to park and camp, and the summers are wonderful. I did not have an A/C while I was there all summer, and did not need it. They do not collect state income taxes, and I think the property taxes are really inexpensive. Not sure about the license plate thing anymore and I don’t remember anyone saying anything about inspections, and I don’t remember seeing any “Smog/Vehicle Inspection Stations.” This is another great state to incorporate in, but that will be saved for a different article.

Over all, since some ground is reasonably priced, but not always in the best or closest places to town, it could be used for a “Legal Residence”, and for the hunter or fisherman, this is a good state to do both.The winters are rather cold, as I have trucked through it a bunch. This truly should be a state to consider.

Montana has really inexpensive property taxes, so that may be an option for some of you that have income where you don’t pay any taxes on it anyway. However, I would be headed south in the winter.

You know, ducks, geese and birds may have a really small space between their eye’s, but even they have enough CENTS to head south when it starts to get cold.

TN and NH: These 2 states do tax you only on dividend and interest income. So, if you are going to have those kinds of passive incomes, either buy Tax Free “Municipal Bonds” that are exempt in those states, or transfer that income to another preferred state. Again, that will have to be a different article, as that can get a bit complicated, and it is best to just see your tax adviser.

General Delivery Mail

If you know where you are going, and you want your mail to be there before you, or about the same time, here is a link to find where the US Postal Office is located, along with the Zip Code and other info that may be of interest. Go to the USPS site. http://www.usps.com

You will see at the top of the page a tab that says: “Locate A Post Office”. Click the tab and on the next page leave the street address blank, then type in the city and state. You will get the ZIP code, plus the physical location of the post office, map, hours of operation, other post offices nearby and some other helpful info.

Here is something to keep in mind. Use a small town if possible. If you use a large town, “general delivery” mail may go to a branch that you did not select, then you are playing “Private Detective” chasing down your mail. Hum, that does not sound like a “Simple Stress Free Lifestyle” to me!

If you are at a campground, or close to a relative, then you have an address for any of the mail forwarders to forward your mail. However, since most of us like to live with “No Strings Attached”, then the General Mail Delivery is a fantastic option on your travels.

How this works is you simply have the mail forwarding provider send your mail to the towns post office where you are staying, or headed. Mail address providers have done this numerous times, so this will not be anything new to them. The mail forwarder company you are using will simply addresses the package to: ( In This Example)

Bernard Mattingly
c/o General Delivery
Town I Select, State Zip Code

Some post office counter personnel will tell you over the phone if it has arrived, like the small towns, but the larger towns normally won’t. To get your mail, you go up to the next clerk with your ID and ask if you have any general delivery mail waiting.

INSURANCE:

I got the pic below from: http://www.iii.org/media/facts/statsbyissue/auto

There is plenty of facts there, so you may want to spend some time there “Window Shopping” for insurance.

You will see that SD is truly a leader in all around places to be based out of, and FL and NV are a bit pricey on insurance and other matters. It all boils down to personal preference and what head aches you want to deal with when it comes to the “Govt. Red Tape!”

insurance_ratesDon’t want to pay “Sales Tax” on your purchases? The Internet is a good way to do that, but when that option runs out, you may want to consider buying your higher priced items in the 5 states of: AK, DE, MT, NH, and OR. These states don’t currently have a sales tax that they collect.

Don’t want to pay taxes on your Social Security Retirement? Then “Do Not” consider these 15 states, as they do tax your Social Security retirement.

1) CO
2) CT
3) DE
4) IA
5) KS
6) KY
7) MA
8) MN
9) MT
10) ND
11) NE
12) NM
13) VA
14) UT
15) VT

I hope this article was enlightening and it brought up some “Ah Ha” moments to help you expand your thinking of what CAN happen and how you can save some money every year that you are paying out now, needlessly. Do your research and figure out which state is best for you.

For me, I am thinking SD, but if I get the job I am looking at, it will be AZ. Yeah, inspections and all, what a bummer. However, there is plenty of other “Perks” that will make it worth putting up with.

Share your thoughts with me, when you get a chance.

Travel On While Saving Money All The Way To The Bank!