Welcome to Colorado, where you can live richly and wisely, and find luxurious adventures on the cheap! In the spirit of The Budget Socialite, I’m here to talk you through how you can make the best decisions to maximize your money while living in one of the country’s most stunning and desirable states. First of all, let’s talk about Colorado’s appeal for luxury living on a budget. From the mountains to the open plains, our state offers luxurious adventures for everyone. You can enjoy Colorado’s pristine national parks, majestic mountain ranges, and beautiful natural wildlife all from a reasonable luxury mountain cabin or condo. Those with an appreciation for fiery sunsets which are nearly impossible to look away from at night might prefer the serenity of the plains or hilly countryside. But wherever you choose to lay your head, you are sure to find luxurious opportunities on a budget. And that needs to be taken into consideration when you file your taxes. The state of Colorado, like many other states within the US, has certain rules regarding residency for state income tax. You may, or may not, be aware of these rules. These rules, in particular, are pretty straightforward, and determine whether or not you are subject to Colorado state income tax. Income tax is collected by the state, based on how much income you have earned in a given time period. Typically, the more you earn, the more you will owe in taxes. Taxable income can include wages, interest and dividends earned from bank accounts, rental markets, loans, stock dividends and more. In some states, such as Pennsylvania, income tax is calculated based on a flat rate, as opposed to the Cuomo method where high income earners undoubtedly pay higher tax rates. The benefits of being in the know about residency rules for income tax are quite simple. You are able to make informed decisions about where you live and what jobs to take. You are able to control how much tax you pay based on where you select to live and work, based on the amount of income you earn, and if you intend to spend the majority of the year in Colorado. By understanding the Colorado residency rules for income tax and tax brackets, you are able to maximize the amount of money you have on hand to spend and enjoy the Colorado lifestyle. A few tips to help you keep your residency status in Colorado under the state’s residency rules for income tax as follows: Now that you have a solid understanding of how you can keep residency status in the Centennial State, let’s talk about how tax savings can enhance your lifestyle spending power. The short answer is: it provides you with more money to spend, which makes life a whole lot better. For instance: Now that you have a better grasp of the benefits of being a Colorado resident (for the purposes of income tax, of course!) let’s talk about some of the possible pitfalls or common mistakes people make related to the residency rules. One issue I have heard of is people renting or buying homes in Colorado, and claiming tax residency without ever setting foot in the state. Unless you are Albert Einstein, this may not be a great idea, as you will have to convince the state income tax people that you were not simply trying to get out of paying taxes in your home state, it wasn’t because you left your socks there. Now that you can breathe a little easier with these Colorado residency rules in mind, it’s time to go and kind both luxury and adventure in the same breath. You can do it all in Colorado, sinfully good food, stunning landscapes, and far away national parks. The state has everything you could ever ask for, so long as you are willing to enter the adventure with a willing heart and mind, and a credit card capable of covering the expenditures for now, and a sense of humor for when things appallingly go wrong. It happens to all of us, so don’t get discouraged if things don’t go as you planned. Keep trying and persevering for adventure will come. If you are unfamiliar with the Colorado residency rules for income tax, you can read all about them here: rules regarding residency for state income tax. Hopefully, you are now shaping up to be an expert, and can help others as they try to readjust to life in the Centennial State.
