Did You Just Relocate to North Carolina with Your Company?
Total Page：16
File Type：pdf, Size：1020Kb
Did you just relocate to North Carolina with your company? Financial, Tax, and Lifestyle Tips for Corporate Professionals Did you just relocate to North Carolina with your company? Financial, Tax, and Lifestyle Tips for Corporate Professionals © 2020 Brightworth. All Rights Reserved. Financial and Tax If your company recently moved its headquarters or established a new office in North Carolina and you have been asked to relocate to the Tar Heel State, you probably have countless questions. A corporate relocation can be both exciting and stressful as you consider which neighborhoods fit your unique preferences, should you rent or buy, what is the cost of living difference, where the best schools are, and more. We hope that this paper will help you make your transition to North Carolina as smooth as possible, and help you consider some issues that may not have been top-of-mind. Understand North Carolina & South Carolina’s Because Charlotte is situated close to South Carolina, Income Tax Structure living in South Carolina while working in North North Carolina’s income tax rate is currently 5.25%. Carolina is also an option. If this should apply to If this rate is higher than the state in which you you, you will need to file a state tax return in North resided, there may be an opportunity to recognize Carolina as a non-resident as well as file a South some income (e.g., realizing capital gains in your Carolina resident tax return because South Carolina portfolio or exercising stock options) before you taxes its residents on all income regardless of the move. This is a topic you may want to proactively state of origin. South Carolina offers its residents explore with a CPA as certain states have recapture a state income tax credit for North Carolina taxes rules whereby if you earned income while working paid – given this, it is important to first calculate in State A and move to State B before the income is your North Carolina tax liability. South Carolina has paid out to you, State A can argue that they have a a progressive state income tax structure with its top claim to their share of the tax burden. Before you tax rate topping out at 7%. While South Carolina’s decide to recognize a sizable amount of income, be income tax rate is higher than North Carolina’s, sure to consult with a CPA who is familiar with North South Carolina residents often pay less in real estate Carolina and your prior home state. property taxes. | 2 Because your take-home paycheck, assuming the for this new cost and consider how the tuition costs same salary, may be higher or lower than your and expenses will be paid. Also, there is always the prior paycheck given the difference in state tax option of enrolling your children in North Carolina’s rates, you should consider doing some quick math public-school system or possibly homeschooling before you sign your relocation package. Other your children. If sending your children to private important considerations include the cost of living school is preferred, you will want to research the differential and how, if at all, your relocation package various private schools in the area to account for compensates you in the event that you will be overall tuition costs, location, overall fit based experiencing a cost of living increase. If needed, upon preferences such as religious affiliation, etc. you can consider negotiating a higher salary to at From a purely financial perspective, developing least keep pace with your projected after-tax an understanding of your annual education costs living expenses. is important because it may influence where you live and how much you can afford to spend on a Cost of Living and Education new home aside from the potential impact on your Cost of living is often a major component within overall lifestyle (i.e, impact on entertainment and an employee’s relocation package. In addition travel budget). Presently, there are more than 80 to understanding housing and recreation costs, private school options in Charlotte with private high you may also need to understand the education school averaging $14,000+ annually1. landscape as well. North Carolina also offers other educational options Private school tuition can be a substantial budgetary such as charter schools, magnet schools, and the item for any family, and if you have never had to North Carolina Virtual Public School. For more pay it before, you will want to proactively budget 1https://www.privateschoolreview.com/north-carolina/charlotte 3 | information, please visit North Carolina If your child would like to pursue their college Department of Public Instruction’s website at education in North Carolina, it can be helpful to https://www.dpi.nc.gov/. know that North Carolina residents can benefit from the Fixed Tuition Program. Assuming the enrollment Consider North Carolina’s National College requirements are met, the Program affords college Savings Program (529 Plan) students attending a UNC system university the Saving for college to help alleviate the escalating ability to complete their four/five-year program of costs of higher education is a major goal for a lot of study without experiencing any tuition increases. working families and contributing to a 529 plan is Universities participating in this program include, a common education savings investment vehicle. among others, the University of North Carolina Unlike the majority of states today, where the full at Chapel Hill, Appalachian State University, UNC or partial 529 plan contribution is deductible for Charlotte, and East Carolina University. state income tax purposes, North Carolina is one of a handful of states with no state income tax deduction Review Your Estate Plan benefit. Even though there may not be an upfront It is always a good idea to revisit your estate plan tax benefit for contributions to a NC 529 plan, the upon moving from one state to another. One proceeds within a 529 plan still have a chance to reason for this is because North Carolina may have grow tax-free and be withdrawn without any tax different estate laws than your previous home consequences so long as the proceeds are used for state. For example, North Carolina does not have qualified education expenses. a state estate or inheritance tax like many other | 4 states. Additionally, it is important to update your to your prior state of residence, they may not be in financial powers of attorney, medical directives/ North Carolina. One option for you to consider is living wills, and estate planning documents such potentially swapping out of them and purchasing as your will and revocable living trusts to ensure North Carolina municipal bonds. While we do your documents comply with prevailing law. not advocate that taxes should drive investors’ Finally, you should revisit and amend, as needed, investment strategy, an investment portfolio should your fiduciary appointments within your estate be constructed with a mindfulness of tax-efficiency. planning documents such as the executor of your Ask for Introductions will, successor trustees named within your trust agreements, and guardians of minor children. After reading this paper, you may find yourself While the previously named individuals may still looking for new tax, financial, and/or legal advisors. be capable and willing to serve when their help is One option is to talk with your new coworkers or needed, it can certainly be a more challenging task neighbors for introductions to potential new tax, to carry out one’s duties and responsibilities while financial, and/or legal advisors. One of the best being separated by hundreds or perhaps thousands ways to find a qualified professional is to ask trusted of miles. friends or colleagues in a similar job type this question: “As things relate to financial planning, Investment Strategy whom have you had a good experience working with Your investment strategy may also need some fine in the past?” tuning. For example, if you own municipal bonds in your portfolio that are tax-exempt with respect 5 | Lifestyle Midwood is among the most diverse and eclectic “Uptown” Charlotte neighborhoods in the area, offering a variety of things to do, see, and drink. The neighborhood If you want to do your best to blend in to your new features thrift shops adorned in graffiti, historic surroundings, it is probably important to know that homes, and a wide variety of restaurants and local Charlotte refers to its downtown area as “Uptown.” breweries. For those that prefer lake living, ”Lake There are numerous online articles describing the Norman and Mountain Island Lake are located reasons for this. In short, the origins of the “Uptown” north of the Queen City and Lake Wylie is situated name are rooted in the topography of the local area southwest of the city, flanked by the North Carolina as well as a city proclamation dating back to and South Carolina state borders. the 1970s. In terms of the residential real estate market, the Housing demand for housing in metro Charlotte has outpaced The metro Charlotte area offers many family-friendly supply. According to World Population Review, suburbs as well as neighborhoods that can appeal to “Charlotte is currently the third fastest-growing a broad range of interests and lifestyles. major U.S. city,” and if “its population growth continues, Charlotte’s population is set to surge by North Davidson, often referred to as “NoDa,” is 47% from 2010 to 2030.”2 In the last couple of years, currently Charlotte’s historic arts and entertainment the Queen City’s population grew at a pace of 90-120 district, and it was previously home to textile people a day.3 Due to the strong population growth, manufacturers and homes for mill workers.