New MI. tax law

[Bobby A]

I just had my taxes done and because of the new law taxing pension checks, I've got stung by the State of MI. and have to pay some pretty big bucks. I've heard of snowbirds like myself switching there physical address to other states to get around this. I'm considering doing the same, switching physical address, drivers license, titles to both vehicles, insurance. My only real big concern is my medical benifits from MI. I'm not on medicare or medicade, I don't wanna give up my good MI. blue cross PPO coverage. Does anyone have any information on do's and don'ts in regards to doing this. The upfront fee's for switching from MI. to Fl. are pretty steep but it would pay for itself very quickly. Any info would be appreciated.

Thanks in advance,
Bobby A

 

[JohnDar]

Seems to me that Michigan directed pension providers to start withholding the correct taxes in the beginning of 2012. They've been doing it to our pensions (other than my military one), which prevented us from getting burned at the stake again. There is also a $40K allowable pension deduction that should have lessened your taxes. Social Security benefits taxed on your Fed return are also deducted from the taxable amount.

 

[Bobby A]

Wow, I'm surprised your the only one replying to this thread John, I know I can't be the only one upset with MI. taxing my pension check.

 

[readytohitheroad]

love Michigan but hate the taxes and costs. I think that Michigan also has the highest in-state camping fee structure in the USA. Almost cheaper to get a hotel! Remember camping near Baraboo WI as an out of stater and it was cheaper than what we paid in Michigan as in-staters.

 

[Bobby A]

love Michigan but hate the taxes and costs. I think that Michigan also has the highest in-state camping fee structure in the USA. Almost cheaper to get a hotel! Remember camping near Baraboo WI as an out of stater and it was cheaper than what we paid in Michigan as in-staters.

Yep, its much cheaper for us to live hear in Florida than Michigan, the only draw back is the sites hear in Fl. are much smaller than MI. the good news is we are only a mile from the Golf of Mexico and watch some awesome sun sets.

 

[Westwind]

Been paying state income taxes on my pension since I retired in 2004, also yearly property taxes on my truck, car, and FW. Rhode Island hasn't figured out how to tax my inhaling and exhaling but I'm sure it's coming!!!!

 

[rick_debbie_gallant]

Ya michigan tax on pension stinks. That is just plain less bucks to spend here in Michigan. Texas sure looks good from here.


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[jimtoo]

Ya michigan tax on pension stinks. That is just plain less bucks to spend here in Michigan. Texas sure looks good from here.

Well ,,, just come on down here to TEXAS,,, what'ya'll waiting for?? We got lots of room and NO STATE INCOME TAX. Great people, warm winters,, blue skies,, a few bugs and snakes... but they won't bother you if you don't bother them..

Jim M

 

[rick_debbie_gallant]

Thanks for the invite Jim. Been in fulton/rockport the past 6 years now and love it. Be there again in a few months for the winter.


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[Dave49]

Being from Mi originally I know all to well about taxes. One of the reasons we went to SD when we went fulltiming. But we have recently been thinking of purchasing another house in MI for a place to land when we can't fulltime anymore. So if I buy this home, I shouldn't have to make that my residence correct? I will only be there very limited time. I'm thinking I can but I have to limit my stay to less than 6 mos. Am I correct?

Dave

 

[TGLBWH]

Since I do taxes and live in Michigan let me chime in. Your limits on pensions bieng taxable are about 97,400 if born before 1946, 20,000 if single and 40,000 if married and born between 1946 and 1954. If you are born after 1954 you will be taxed on all of your pensions. These amounts are for pretty much any pension that comes on a form 1099R. As far as owning a home, the Homestead Property tax credit is available only if your household resources are under 50,000 per year with reductions in the 1200 per year amount starting at 21,000 or 41,000 depending on age. If not a resident you would also lose protection under the Headlee amendment which only allows your property taxes to increase by the rate of inflation each year. This has not been an issue in the past few years since values have fallen. A solution that is perfectly legal for a married couple would be for the one with the highest pension to establish residency in whatever state and the other to own and keep residency in Michigan. I am already planning to do this when the DW retires.

 

[JohnDar]

This is all very interesting and I'm sure for some, it may make financial sense to change permanent addresses, et. al. Personally, I like Michigan with all of its warts. Normally, four real seasons (none extreme), no storms to blow me from one coast to the other, plenty of interesting things and places to see, and large, natural lakes that still have water in them. And English is still the predominant language.

Although I don't like paying more taxes than I have to (or feel I have to), for me it's more of a question of getting your money's worth for what you do pay. Not real sure any state has the market cornered on that issue. One lesson I've learned is that the grass always seems greener until you find it's been fertilized with B.S.

 

[Bobby A]

This is all very interesting and I'm sure for some, it may make financial sense to change permanent addresses, et. al. Personally, I like Michigan with all of its warts. Normally, four real seasons (none extreme), no storms to blow me from one coast to the other, plenty of interesting things and places to see, and large, natural lakes that still have water in them. And English is still the predominant language.

Although I don't like paying more taxes than I have to (or feel I have to), for me it's more of a question of getting your money's worth for what you do pay. Not real sure any state has the market cornered on that issue. One lesson I've learned is that the grass always seems greener until you find it's been fertilized with B.S.

Don't get me wrong John, I love MI. also, been born and raised there, my whole family lives there, I too love the lakes and the wide open spaces and all the seasons. But when I was entertaining the idea of retiring a few years back, I was given a monthly pension figure, it was up to be to decide if I could live on that fiigure, and I excepted that figure and retired. So now, several years later, with increased health care costs coming out of my pension and now this State tax I need to do something to stay above water.

 

[JohnDar]

Don't get me wrong, Bobby, I'm not criticizing anybody's choices or decisions. Folks have to do whatever works for their situation and they're all individually unique.