I’m moving overseas. How can I make sure N.J. doesn’t tax my IRA?

By Karin Price Mueller | NJMoneyHelp.com for NJ.com


Q. I will be retiring soon. I currently live in New Jersey, but when I retire, I plan to live abroad, but in different countries with a three-month stay in each. I will be living in Airbnbs and I won’t have a home or rental in New Jersey. Given that I won’t have a fixed mailing address, how can I let New Jersey know I am moving out for good so the state won’t tax me when I withdraw from my IRA?


— Traveler


A. Congrats on the new adventure.


This is a very exciting move.


The easy answer to your question is to tell your IRA custodian to stop withholding New Jersey taxes from your IRA distributions, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.


But the harder question, he said, is: How will the world reach out to you when you have no fixed address? How would the IRS contact you or how would Social Security contact you?


Kiely he gets his financial statements online, but the institutions still have his home address.


“If I die, the insurance company would send my wife a check. They would mail it to my home address,” he said.


When you tell your IRA custodian that you are no longer a New Jersey resident they will ask you for your new address.


“One solution is to have an agent act on your behalf. This agent can be a relative, a friend or your attorney. You would use you agent’s mailing address as your address,” he said. “Periodically your agent would forward any mail to you that you need to see to wherever you are currently in the world.”


If your agent is in New Jersey, it wouldn’t make you a New Jersey resident, he said.


“When I was in the Navy I was usually at sea. My fixed address was Fleet Post Office New York. That didn’t make me a New York resident,” he said.


Also remember that every U.S. citizen or resident must file a federal income tax return if they make more than the standard deduction, Kiely said. This is regardless of where in the world they earned the income, he said.


Email your questions to Ask@NJMoneyHelp.com.


Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.

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