Do I continue filing a state tax return?

Some states really do not have income taxes, which makes life much easier for you. These states derive their revenue from sources other than the federal government, such as property taxes and sales taxes. The following states do not require you to file a state tax return

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

In addition, because New Hampshire and Tennessee only levy income taxes on dividend and interest income, your tax filing procedures will be less complicated in those jurisdictions.

On the other side of the scale, a number of states have strict requirements that can make the tax process a little more complicated when deciding which states to file returns in; these states are referred to as sticky states. The tax process is made a little more complicated when deciding which states to file returns in. Sticky states make it difficult to terminate your formal residency, and they frequently consider you to be a resident even if you move away permanently.

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What to claim, foreign tax credit (Form 1116) or foreign earned income exclusion (Form 2555)?

In order to provide relief from double taxation, both the Foreign Tax Credit and the Foreign Earned Income Exclusion are meant to do so; yet, they accomplish this goal in quite different ways.

Do I continue filing a state tax return?

Some states really do not have income taxes, which makes life much easier for you.

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