I work as a travel healthcare worker, spending most of my year working away from my home address. There are very specific guidelines I need to follow to avoid running afoul of the IRS.
Going this route will likely make wherever you list for income purposes as your "domicile state." (if it's outside of the state you already reside in) I.e. where you earn most of your money and spend most of your time.
At a minimum this will subject you to the new locations income taxes and residency laws (edit:) while forfeiting any benefits from the state you actually live in. If there is any doubt about this a court will decide for you.
If a new state is declared your domicile, legally you need to transfer everything over. Driver ID, insurance, etc, and those premiums will likely bump to match the new location's COL. And it would really suck to trap your residency in a state that you don't actually own anything in, OR I'd imagine this would pose a barrier at tax time when trying to declare residency there. (Edit:) depending on if you own your house, you may pay extra taxes on it, or penalities if it is no longer considered your primary residence.
IRS will not be happy if there is any tax related fraud going on, but as long as you file appropriately, you should be fine.
IMO, if you wanted to do this while minimizing your legal risk, find the highest COL area in the same state. I certainly can't guarantee this is totally kosher by tax law, but there's nothing glaringly obvious that says this is a bad idea as far as the IRS is concerned.
Although even within the same state, I'd be more concerned with the employer finding out as I'm sure that deception could be classified as theft. You're getting terminated immediately, unable to claim unemployment, while being sued for the overpay.
Seems like an overall risky prospect. If you choose to proceed with this route, 100% seek legal council.
n37x t1_jecw8eh wrote
Reply to Renting two places simultaneously to increase income: is this something I can do? by Overall-Ad2235
IANAL but will give you my perspective.
I work as a travel healthcare worker, spending most of my year working away from my home address. There are very specific guidelines I need to follow to avoid running afoul of the IRS.
Going this route will likely make wherever you list for income purposes as your "domicile state." (if it's outside of the state you already reside in) I.e. where you earn most of your money and spend most of your time.
At a minimum this will subject you to the new locations income taxes and residency laws (edit:) while forfeiting any benefits from the state you actually live in. If there is any doubt about this a court will decide for you.
If a new state is declared your domicile, legally you need to transfer everything over. Driver ID, insurance, etc, and those premiums will likely bump to match the new location's COL. And it would really suck to trap your residency in a state that you don't actually own anything in, OR I'd imagine this would pose a barrier at tax time when trying to declare residency there. (Edit:) depending on if you own your house, you may pay extra taxes on it, or penalities if it is no longer considered your primary residence.
IRS will not be happy if there is any tax related fraud going on, but as long as you file appropriately, you should be fine.
IMO, if you wanted to do this while minimizing your legal risk, find the highest COL area in the same state. I certainly can't guarantee this is totally kosher by tax law, but there's nothing glaringly obvious that says this is a bad idea as far as the IRS is concerned.
Although even within the same state, I'd be more concerned with the employer finding out as I'm sure that deception could be classified as theft. You're getting terminated immediately, unable to claim unemployment, while being sued for the overpay.
Seems like an overall risky prospect. If you choose to proceed with this route, 100% seek legal council.