Expat Forum For People Moving Overseas And Living Abroad banner
1 - 20 of 27 Posts

·
Registered
Joined
·
8 Posts
Discussion Starter · #1 ·
FY2022
  • 0 days stayed in USA
  • No home (primary or secondary) in USA
  • US citizen
  • No employment in USA
  • Acquired driver license outside USA (but California DL is still valid, hasn't expired)

Above are some basic facts.

Question:
Do I need to file CA state tax for FY2022?

Clearly, I am not a resident of CA and have no intention of staying there. I have permanently moved out of USA. The only sticking point is that my California driver license is still valid (has not expired yet, and not cancelled). I am just letting it expire on its own. Any real experience here, anyone? Do I need to inform FTB about this or just skip filing CA tax for 2022?

Appreciate any practical suggestions or experience.
 

·
Registered
Joined
·
113 Posts
I stopped filing in CA when I stopped using my address there. But the first year I lived abroad I was still using a US bank account with my CA address, so I did file there that year, as it was my old address that a couple of insurance payments and my covid payments had gone to. Not sure that’s helpful but it sounds like you’re all good.
 

·
Registered
Joined
·
8 Posts
Discussion Starter · #3 ·
That is a good point. I do have a US bank account, including a brokerage account, which use my previous outdated US address. I no longer live at that address since end of FY2021, so shall not concern FTB, but I don't know. You raise an interesting point though, may be I shall consider changing those to an international address. Thank you.
 

·
Administrator
Joined
·
53,169 Posts
Simply having a still-valid driver's license should not make you subject to CA state income taxes. Neither should just having a bank account with a CA address - though that may depend on a variety of factors, including how much is in the account and how much income the account generates.

OTOH, changing a bank or brokerage account to a non-US address may result in the financial institution closing the account. You plays the game and you takes your chances.
 

·
Registered
Joined
·
8 Posts
Discussion Starter · #5 ·
Most large institutions in US support international address on the accounts, at least that is what I have been told by couple of them I called. So I doubt they will close these accounts outright, although, these accounts may become restricted when they are marked "international" on address change and that is something I shall inquire further about I guess.

If FTB is looking at bank income, then interest income won't be much at their current tiny interest rate.
If FTB is looking at capital gains in the brokerage account, that amount may vary depending on buy/sale activity of the account for individual.

But I am not sure if I can tell for sure that having an account with invalid/outdated CA address, will still trigger state tax. That would seem pretty outrageous but FTB is outrageous so hoping for the best.
 

·
Registered
Lived in Alabama, California, Florida, and Mexico - plan to immigrate to Spain in 2022
Joined
·
68 Posts
I strongly urge you to look into changing the address on your accounts just to avoid any difficulty. You might read: https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf which is guidance on determining California tax residency.
Safe Harbor may apply to you if you don't return:
Safe harbor is available for certain individuals leaving
California under employment-related contracts. The safe
harbor provides that an individual domiciled in California
who is outside California under an employment-related
contract for an uninterrupted period of at least 546
consecutive days will be considered a nonresident unless
any of the following is met:
• The individual has intangible income exceeding
$200,000 in any taxable year during which the
employment-related contract is in effect.
• The principal purpose of the absence from California is
to avoid personal income tax.

But the best thing to do is review and "be on the right side of" each of the following:
  • Amount of time you spend in California versus amount of time you spend outside California.
  • Location of your spouse/RDP and children.
  • Location of your principal residence.
  • State that issued your driver’s license.
  • State where your vehicles are registered.
  • State where you maintain your professional licenses.
  • State where you are registered to vote.
  • Location of the banks where you maintain accounts.
  • The origination point of your financial transactions.
  • Location of your medical professionals and other healthcare providers (doctors, dentists etc.), accountants, and attorneys.
  • Location of your social ties, such as your place of worship, professional associations, or social and
    country clubs of which you are a member.
  • Location of your real property and investments.
  • Permanence of your work assignments in California.
 

·
Registered
Joined
·
582 Posts
@taxmeplease -- @tomwins has given some good poop. It's de rigueur to file a "Part-year" state tax return when leaving a State: https://www.ftb.ca.gov/file/personal/residency-status/part-year-and-nonresident.html , along with changing your address on all accounts. Most states it's not a big issue, but CA is one of the few states that "will track you down" for their opinion of a perceived debt of a few shekels. So ideally, if you filed a part-year CA return for 2021, you should be able to safely, not file a return for 2022 (but I'd recommend expeditiously changing your address out of CA on everything.) I have personally dealt with the wrath of CA trying to claim that a now non-resident was still a resident -- it's not that hard to eliminate any CA nexus.

@Bevdeforges statement about the closure of bank/brokerage accounts or restrictions is a real thing. I had this happen to me and the solution was to contract with mail forwarding firm, in a no tax state, and change the address of all my official correspondence, including banks and brokerages -- problem solved. I also changed my voter registration to my "new" state and eventually got a U.S. drivers license, in the new state (when I visited a few years later, exchanging my old DL.) Cheers, 255
 

·
Registered
Lived in Alabama, California, Florida, and Mexico - plan to immigrate to Spain in 2022
Joined
·
68 Posts
I changed my residency from California to Florida and have used a mail forwarding service for seven years. I've just changed it to a company that will scan any mail I get, deposit checks if I get them, will forward mail I need to any address worldwide. So far, I'm much happier with this service than the one I had been using. I get an email of the envelop of the letter and I can decide what to do with it (scan, shred, or forward).

Taxmeplease, to summarize:
1. Get rid of your CA license (since you aren't using it). Use this form to "forfeit" your CA license: https://www.dmv.ca.gov/portal/uploads/2020/05/dl142-1.pdf
2. Change your address with your financial institutions to outside of California. I am using my mail-forwarding service as my address.
3. File a partial year tax return in California if you didn't for tax year 2021.
4. Also, you didn't mention it but if you are registered to vote you should change your voter registration to another state. I am preparing to move to Spain and the Registrar of Voters Office in Tallahassee told me to use their address on the form to establish my district. Then they will send me a ballot via email. I can then fax it back to them.
5. Look over the other items in msg #6 to see if you have any other ties to California.
 

·
Administrator
Joined
·
53,169 Posts
Way back when they first established the right for overseas Americans to vote in the last state they were resident in before leaving the US, they supposedly formalized the principle that only being registered to vote in a state does not constitute residence there. You may want to contact the US expat group AARO if you have concerns (they were very involved in the initial campaign to allow for voter registration for overseas residents). Voting

You may simple want to consider re-registering to vote from overseas (whether in California or whatever state your last residence address was). Or you can contact FVAP: Americans can vote. Wherever they are.
 

·
Registered
Joined
·
8 Posts
Discussion Starter · #10 ·
@tomwins @255 Interesting details on mail-forwarding & part-year return.
1. Yes, good point. I had been thinking about it. But now that you bring up this, I believe I will go ahead with intentionally forfeiting the license.
2. This is the tricky one. Are these mail forwarding services reliable, in the sense, they will open the mail, which might have confidential info. If not, I might just provide overseas address on the account, if banks do insist they will not close down the account.
3. Filed 2021, will skip 2022 (on-going determination..).
4. Not registered to vote yet with any state
5. "The origination point of your financial transactions". Is this the IP address of country where the transaction originated, do you guys know? So if I do a wire-transfer from USA to outside-of-USA, but the origin of the transaction happened from outside-of-USA over the login into account over internet, I believe that would count as non-resident? Although bank will be able to provide that proof, if they maintain an audit of such requests for whatever statue of limitation is, or I can proactively acquire this info from bank and keep for my record.

One basic question:

If I determine that I am not a resident, do I simply NOT file the return, or if I will need to inform FTB that "I am not a resident and will not be filing a return for the year" by sending a letter of sorts?

thank you guys, it has been pretty helpful !
 

·
Registered
Joined
·
582 Posts
@taxmeplease -- I currently have two mail forwarding services, for personal mail, one in WA (that I've had for almost 30 years) and a relatively new one in Florida. My original one keeps my mail and only sends it out when I request it. My Florida service scans all my mail, as part of my fee, and asks if I want it forwarded or shred. Supposedly, I am supposed to pay for any forwarding, over $1.00, but so far, everything has been forwarded, gratis. Maybe because I'm older, I have zero concerns with my mail being opened, scanned and shredded. I have developed a relationship with the owners of both businesses. Most firms give you an option to open/scan or just hold and forward -- your choice. I've had no issues in nearly 30 years using these type of services. I also have utilized two firms situationally in NV, two in WY, and one in BC, Canada, in the past. Just an aside, the business in WA has gone through three owners since I've been a client! I also currently have business mail forwarding services in WY & FL. The Florida firm is the same outfit I use for my personal mail.

I historically operate all my U.S. finances as if from the U.S., since I initially had bank/brokerage issues, when I lived in South America. I have heard of others having an IP address issue; I have never had a problem. There have been other members, of this forum, that have had issues that were reportedly solved with using a VPN.

If you determine you are not a resident of CA -- there is no need to file a tax return. If they contact you asking about your return, you just need to provide "proof" that you are not a CA resident. Cheers, 255
 

·
Registered
Joined
·
8 Posts
Discussion Starter · #12 ·
@255 Thank you for giving me sufficient details about the mail forwarding, very helpful.

Good to know about filing process. Thanks much, appreciate all the suggestions from everyone ! Feels good to know that there are other people in the same boat and have overcome the wrench thrown from FTB. Regards.
 

·
Registered
Joined
·
40 Posts
I changed my residency from California to Florida and have used a mail forwarding service for seven years. I've just changed it to a company that will scan any mail I get, deposit checks if I get them, will forward mail I need to any address worldwide. So far, I'm much happier with this service than the one I had been using. I get an email of the envelop of the letter and I can decide what to do with it (scan, shred, or forward).

Taxmeplease, to summarize:
1. Get rid of your CA license (since you aren't using it). Use this form to "forfeit" your CA license: https://www.dmv.ca.gov/portal/uploads/2020/05/dl142-1.pdf
2. Change your address with your financial institutions to outside of California. I am using my mail-forwarding service as my address.
3. File a partial year tax return in California if you didn't for tax year 2021.
4. Also, you didn't mention it but if you are registered to vote you should change your voter registration to another state. I am preparing to move to Spain and the Registrar of Voters Office in Tallahassee told me to use their address on the form to establish my district. Then they will send me a ballot via email. I can then fax it back to them.
5. Look over the other items in msg #6 to see if you have any other ties to California.
what mail forwarding service are you using now?
 

·
Registered
Joined
·
795 Posts
what mail forwarding service are you using now?
I use Travelling Mailbox with a Florida address. They are good but you might want to browse some others for the one that fits your needs. The key is how much mail you get and and if you want it opened and scanned. Some offer a low monthly fee but are very expensive for opening and scanning. I pay $19.95 a month that includes up to 35 page scans.

I hardly get any physical mail now because you can do everything online with banks, etc. IRS is one that still sends mail.
 

·
Registered
Joined
·
795 Posts
@255 Thank you for giving me sufficient details about the mail forwarding, very helpful.

Good to know about filing process. Thanks much, appreciate all the suggestions from everyone ! Feels good to know that there are other people in the same boat and have overcome the wrench thrown from FTB. Regards.
From my experience with California. I have not lived there since 2003.

When I moved overseas in 2012 I thought it would be ok to use my sister's California address for mail, which included banks and brokerage with small amount of taxable interest.

California is very aggressive and I think "robots" are scanning data looking for potential tax revenue, justified or not. I think there typically a two year lag before they contact you. For instance, I received a letter for 2013 tax year in 2015. In the letter they send, if you want to protest, you have X time to respond. How to protest is all laid out in the letter.

They are a big mess. Three times they have sent me letters for different tax years and three times I have returned the protest, reminding them of what I told them for the previous years. They don't care. It is all computerized.

I changed my address for everything to Travelling Mailbox in Florida. So far, so good.

So my advice is what you are doing. Don't file a 2022 California return if you did not live there at all during 2022. In 2024 the bots might send you a letter claiming you owe CA taxes. Just submit the protest and say you don't live in California along with any other pertinent info.
 

·
Registered
Joined
·
8 Posts
Discussion Starter · #16 ·
@DonAndAbby Ah, so even banks generating minimal interest income, having a CA address on file, are also under scanner. Thanks for mentioning about the 'protest' aspect of state taxation. So basically, I will go into a wait-and-watch cycle after FY2022 tax season is over :) You are also right that banks usually send no snail mails these days, which is great, as may not have to sign up for scanning of papers with mailbox. With my IRS online account, I am able to see notices online.

My current action plan based on you guys suggestions:
===
a. Hire a CA in USA (sounds like I shall shell out some money and have a formal discussion). Might help me in a future-protest.
b. Change my address to international address with FTB & IRS (done with my FY2021 filing).
c. Forfeit CA DL. (sent paperwork).
d. Bank account which are issuing interest, change address to international address (done).
e. Change address on life insurance to international one (done).
f. Signup for a US mailbox. (thanks you guys for some suggestions).
g. Brokerage accounts which have some stocks, change address to a US-mailbox address. (Still debating if I shall use US-mailbox or my international-address). Speaking with these firms over phone. Unfortunately, most of the customer reps don't understand the complexity involved, so are unable to guide. I spoke to a senior associate, and she has escalated it to someone else, waiting for their response.
h. Change address on credit cards to be my international address (done). They are still working, so good.
i. Catch some sleep.

This thread is turning out to be an eye-opener for me and may be others in future would find it useful, if they ever moved out of CA.
 

·
Registered
Joined
·
795 Posts
See below.

@DonAndAbby Ah, so even banks generating minimal interest income, having a CA address on file, are also under scanner.
Yes, the trigger for my 2015 return was exactly this:
New York Life interest: $27
Fidelity Interest $20
Fidelity Dividend $5
This is because I still had those addresses at the California address. So they said I owed them approximately $1500 plus $500 penalty for tax year 2015.

I forgot to mention. I was using a CPA in Kentucky from 2010 to 2020. He told me this was all BS and just send the protest.

Thanks for mentioning about the 'protest' aspect of state taxation. So basically, I will go into a wait-and-watch cycle after FY2022 tax season is over :) You are also right that banks usually send no snail mails these days, which is great, Some banks require you to opt in for online only. as may not have to sign up for scanning of papers with mailbox. With my IRS online account, I am able to see notices online. Certain things the IRS will not make available online. They still mail me my identity PIN and I don't think it is online.

My current action plan based on you guys suggestions:
===
a. Hire a CA in USA (sounds like I shall shell out some money and have a formal discussion). Might help me in a future-protest.
Do you mean CPA? I wouldn't worry about it unless you have a lot of income and/or complicated taxes. Even while living overseas, you still need to file Federal income tax for your U.S. and overseas income.
b. Change my address to international address with FTB & IRS (done with my FY2021 filing). Based on my experience, use a U.S. mailbox address in a no income tax state for everything.
c. Forfeit CA DL. (sent paperwork). That is probably OK but it would be good to keep a DL in a tax free state if possible. Might come in handy.
d. Bank account which are issuing interest, change address to international address (done). I recommend using the domestic mailbox address for everything. Not sure where you live, but here in the Philippines mail service is terrible. I'm lucky to get anything. In my Traveling Mailbox, I get checks, download them, then deposit them to my U.S. Chase account. My first stimulus check was mailed to the Philippines and took 2.5 months to arrive. I immediately sent in the IRS address change form and it took effect before the next stimulus.
e. Change address on life insurance to international one (done).
Recommend the U.S. mailbox.
f. Signup for a US mailbox. (thanks you guys for some suggestions).
Use this for everything.
g. Brokerage accounts which have some stocks, change address to a US-mailbox address. (Still debating if I shall use US-mailbox or my international-address). Speaking with these firms over phone. Unfortunately, most of the customer reps don't understand the complexity involved, so are unable to guide. I spoke to a senior associate, and she has escalated it to someone else, waiting for their response.
If the U.S. brokerage knows you are living overseas, they will lock your accounts. (Fidelity and Scwab for sure) This is mostly because of U.S. mutual funds. There are some laws prohibiting ownership of mutual funds while living overseas. Stupid, yes. You can open an International Account with them but you will not be able buy and sell certain products such as the mutual funds. When I first moved (like you) I changed everything to my foreign address. I got the bad news letter from Fidelity but it was easy to fix. I just changed my address to my sister's California address and they were happy. But then California because a problem, as noted, so I changed everything to Traveling Mailbox. That is why I recommend changing everything to a U.S. mailbox. Less headaches in the long run.
h. Change address on credit cards to be my international address (done). They are still working, so good. I would use the U.S. mailbox. Some banks and credit cards do not want you to be overseas permanently.
i. Catch some sleep.
Lastly, while overseas, use a VPN when you sign into your U.S. financial accounts. I use Express VPN.

This thread is turning out to be an eye-opener for me and may be others in future would find it useful, if they ever moved out of CA.
 

·
Registered
Joined
·
582 Posts
@taxmeplease -- I concur with all that @DonAndAbby posted. Please be aware that there have been a few posters, on this forum, that contacted their banks/brokerage firms, were told everything was OK to use an international address and then were later froze out (on a routine compliance sweep.)

My wife and I eventually took a "vacation" to Florida, exchanged our driver's license for a FL DL, opened a FL bank account, filed a "Declaration of Domicile" with the county clerk where we previously contracted for a mail forwarding service, licensed our U.S. vehicle and registered to vote. This is de rigueur for the RV community where FL, SD & TX all have thriving businesses that support travelers. I'll file a part-year tax return for 2021 (currently on extension.) Cheers, 255
 

·
Registered
Joined
·
795 Posts
My wife and I eventually took a "vacation" to Florida, exchanged our driver's license for a FL DL, opened a FL bank account, filed a "Declaration of Domicile" with the county clerk where we previously contracted for a mail forwarding service, licensed our U.S. vehicle and registered to vote. This is de rigueur for the RV community where FL, SD & TX all have thriving businesses that support travelers. I'll file a part-year tax return for 2021 (currently on extension.) Cheers, 255
Sorry, off topic....
@255
Do you think I could get a Florida driver's license if I visited and if so what would they ask for? My situation is:
Resident of FL 2003-2006
Owned a house in Broward County 2003-2020. Rented it from 2006 to 2020 when I sold it.
Had a FL drivers license and registered to vote in Broward. Not sure when the FL driver's license expired.
Moved to Germany in 2006 and had German DL.
Moved to Kentucky in 2010 and got Kentucky DL. Expired in 2015.
Moved to Philippines in 2012. Philippines DL is the only one now.
Maintained voter registration in Broward and voted in the 2020 election.
Have my U.S mailing address in Orlando.

We might be moving to the U.S. in 2023 or 2024. Having a U.S. DL ahead of then would be beneficial for me in regards to reestablishing domicile for the move back to the U.S. I might be making a trip over before we move.
 

·
Registered
Joined
·
582 Posts
@DonAndAbby -- Your question: "Do you think I could get a Florida driver's license if I visited and if so what would they ask for?" Yes, that's what we did. Since you've lived in the US. last, the "Real ID" laws have taken effect: U.S. Citizen . We presented our U.S. passports, our SS Cards along with our cell phone, automobile insurance bills, copies of last years 1099-Rs, and our checking account statements (we had already changed these accounts to our Florida address, in anticipation of our trip.) Look at the list and pick what you can provide. In the end, they didn't accept everything for my wife, so she had to sign an attestation form. In our case, we were exchanging our old AZ licenses (still current,) but if you need a new license, you'll need to take the driver's tests you did when you were 16 (unless you want to "exchange" your Philippine's license, even if you could. If I were you, I'd take both your old FL DL and your current DL (to avoid Driver's Ed.) There is also a Traffic Law and Substance Abuse (TLSAE) course that FL requires -- it can be done online: What is Traffic Law and Substance Abuse Education (TLSAE) and how do I find the approved listing of TLSAE course providers? . We were exempt, since we were exchanging licenses. You can also register to vote, when you get your license (changing from Broward to Orange County.) Cheers, 255
 
1 - 20 of 27 Posts
Top