This is part of a special Global Mobility Tax client alert series - sharing stories and situations where we have provided practical mobility solutions.
Action #8 Choose your Mobility Tax Provider Wisely
Taxpayer permanently relocated to another country and was responsible for their own taxes. His relocation expenses became taxable and a personal accountant prepared the Tax Returns and Tax Equalization Statement which resulted in the company owning him $90K.
ACTION: After review of equalization statement and residency positions taken on the state tax return, GMT noted a few items were incorrect and determined that taxpayer could break California tax residency. The tax equalization statement and state tax return were revised accordingly.
IMPACT: The income tax due to the State of California was significantly reduced and both company and taxpayer saved money. The returns and tax equalization statement were also now prepared correctly.
SAVINGS: The company saved a significant amount of money, $68,000, by reducing the amount owed back to the taxpayer. Breaking California State residency, lowered the tax liability resulting in a larger state tax refund due back to the taxpayer of $36,000.
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