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Posted: 1/4/2006 8:49:35 AM EDT
I live in a state that has a state income tax. I put money in a 401K and it's tax deferred. When I retire and move to a state with no income tax like Florida or Texas , can the original state come after me for their share of state income tax?
Link Posted: 1/4/2006 9:18:15 AM EDT
You will be taxed by the state where you reside when you receive the income.
Link Posted: 1/4/2006 12:04:13 PM EDT
[Last Edit: 1/4/2006 12:04:34 PM EDT by scuba_ed]
California tried that tactic on it's retirees who fled to neighboring states with lower taxes. I don't recall the specifics, though I beleive California's position was struck-down at some court level.


Link Posted: 1/5/2006 4:35:53 PM EDT
Another question: there's a limit to how much you can put in a 401K, $15,000 I think. Does that include or exclude the amount the employer matches? For example if employer matches $1 for $1 and I put in $15,000, can the employer still put in another $15,000?
Link Posted: 1/6/2006 10:13:34 AM EDT
[Last Edit: 1/6/2006 10:14:23 AM EDT by scuba_ed]

Originally Posted By AssaultRifler:
Another question: there's a limit to how much you can put in a 401K, $15,000 I think. Does that include or exclude the amount the employer matches? For example if employer matches $1 for $1 and I put in $15,000, can the employer still put in another $15,000?



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The $15,000 max. limit for FY2006 does not include your employers match, only your contributions are counted toward this amount. Good on you for looking at this goal and deferring as much as you're able to tax-deferred. So many simply stop at what employers will match.


ETA: Also max. out your IRA, even if you can't deduct it!


Ed
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