Moving from California to Idaho:

Residency, Taxes, and Other Financial Considerations

What changes when you move?

You have the expected: meeting new neighbors, figuring out when the trash comes, and sending your kids to a new school.

There’s also the financial implications, especially if you move between states. A California to Idaho move means planning for things like:

  • New state income taxes

  • Figuring out which income is still taxable by California

  • Capital gains taxes from your home sale

  • If a Roth Conversion makes sense after you move

  • Amending your trust and estate plans

Integrating everything into your financial plan is the next step.

As a team with Advisors who have relocated to Idaho, we have experience coordinating every part of this move for your financial and tax strategy.

The right decisions will vary from family to family, but certain moves should be made while you are still a California resident, and others after you become an Idaho resident.

  • Invest Tax-Efficiently

    High Yield Savings Accounts allow you to earn a return on your liquid cash. Treasury Bills are a lesser-known alternative with another benefit: all earned interest income is exempt from State & Local income taxes.

    Save Almost $12k in Taxes Each Year with a Treasury Bill

  • Consider a Roth Conversion

    Moving to a lower tax state means you may want to transfer your Traditional IRA or 401(k) funds to a Roth account. You’ll owe taxes on the amount you converted, but after, it will grow tax-free forever.

    How a Roth Conversion Can Help Maximize Wealth

  • Mitigate Future Estate Taxes

    If your net worth is over a certain amount, all of your assets may be subject to a 40% tax before going to your heirs. We recently helped a high net worth Idaho family set up a trust that will reduce their estate taxes by $2M.

    Reduce Estate Taxes By $2M With a Spousal Lifetime Access Trust

  • Plan for Education Costs

    When deciding how to save for your child’s college tuition, there are state-level implications to consider. For example, in Idaho, 529 contributions are partially tax-deductible. In California, they are not.

    California vs. Idaho Considerations for Education Saving Plans

  • Reduce Capital Gains Taxes

    A woman who sold her home called us with a good problem: years of appreciation left her with $2M in capital gains. Her two questions: how bad will the tax bill be in April, and is there anything she can do about it?

    5 Ways To Reduce Your Tax Bill After Selling Your Primary Residence

  • Plan as a Business Owner

    If you own a business and moved states, the this opens new planning opportunities. For example, California does not offer tax breaks for employer contributions to Defined Benefit (DB) Plans, but Idaho does.

    Turbo Charge Your Retirement and Get a Tax Break

  • Reduce Retirement Costs

    In retirement, you need to plan for ways to reduce high but necessary costs, like Medicare premiums. One of our Idaho clients was spending over $600 per month for this, until we helped her reduce this bill.

    Reducing Medicare Surcharges in Idaho

  • Update Your Trusts

    Different states tax trust income differently, which means you may have new planning opportunities if you moved. And don’t worry - if you have an irrevocable trust, you might still be able to update it.

    How to Update an Irrevocable Trust through Trust Decanting