Many methods of income tax planning focus primarily on reducing federal tax liability. Individuals living in high state tax jurisdictions, such as California, also seek to mitigate state income tax.
With some state income tax rates as high as 13.3%, it can be a significant burden for those with considerable income-generating assets. Establishing a NING trust may help reduce the state tax liability.
The New York Times recently published an article about how the California Bay Area is about to experience a huge financial shakeup. Several high-profile companies are about to go public including Uber, Lyft, Airbnb, and Pinterest. With what the NYT refers to as “IPO-palooza,” companies worth upwards of $200 billion will create millionaires overnight.
While this is great news for the newly minted millionaires, it could cause a strain on San Francisco’s economy, displacing many people from their homes and making the already expensive city even less affordable. Moreover, with the new State and Local Income Tax (SALT) deduction capping at $10,000, even the new wealthy Californians will be scrambling to look for ways to protect their assets from massive capital gains and income taxes.
Alliance Trust Company in Reno has a sizable client base in Silicon Valley, as many prominent residents in this influential area look east to Nevada when doing their estate planning.
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