Ask HN: Best USA state to be self-employed in? • Hacker News Board

Re: Ask HN: Best USA state to be self-employed in?

#11

Post by garmaine » Thu, Jan 07, 2021, 9:33 AM UTC

emteycz wrote: post #9

garmaine wrote: post #5

Earlier quoted context omitted.

Puerto Rico would avoid federal taxes. But I don't think the OP should be making this choice based on taxes.

A citizen of the US can't avoid federal taxes anywhere

Not true! Google "puerto rico federal income tax" if you don't believe me.

https://www.forbes.com/sites/robertwood/2019/09/09/move-to-p...

(Despite saying "not exactly" in the title, it is in fact exactly that. Read the details. PR residents don't pay federal income tax. There's just some caveats if you're trying to move there as a tax dodge.)

Re: Ask HN: Best USA state to be self-employed in?

#12

Post by garmaine » Thu, Jan 07, 2021, 9:34 AM UTC

wheresmycraisin wrote: post #10

emteycz wrote: post #9

Earlier quoted context omitted.

A citizen of the US can't avoid federal taxes anywhere

Assuming you're not working a multi national corp that has branches in the US (and therefore reports to the irs), I can't imagine hiding income abroad is all that difficult with a few shell LLC's and trusts.

That's evading taxes, not avoiding taxes (legal distinction).

Re: Ask HN: Best USA state to be self-employed in?

#13

Post by emteycz » Thu, Jan 07, 2021, 11:32 AM UTC

garmaine wrote: post #11

emteycz wrote: post #9

Earlier quoted context omitted.

A citizen of the US can't avoid federal taxes anywhere

Not true! Google "puerto rico federal income tax" if you don't believe me. https://www.forbes.com/sites/robertwood/2019/09/09/move-to-p... (Despite saying "not exactly" in the title, it is in fact exactly that. Read the details. PR residents don't pay federal income tax. There's just some caveats if you're trying to move there as a tax dodge.)

I thought that applies only to non-US citizen Puerto Rico residents. Seems like you're right, thanks for correction!

Re: Ask HN: Best USA state to be self-employed in?

#14

Post by codegeek » Thu, Jan 07, 2021, 1:24 PM UTC

Cyder wrote: post #2

Many business incorporate in Delaware since they have very friendly business taxes. If i remember right, they also have no personal income tax, like Texas and Tennessee. https://duckduckgo.com/?q=best+states+to+be+self+employed&t=...

Delaware does have personal income tax. It doesn't have Sales tax.

Re: Ask HN: Best USA state to be self-employed in?

#15

Post by GoldenMonkey » Thu, Jan 07, 2021, 5:00 PM UTC

emteycz wrote: post #9

garmaine wrote: post #5

Earlier quoted context omitted.

Puerto Rico would avoid federal taxes. But I don't think the OP should be making this choice based on taxes.

A citizen of the US can't avoid federal taxes anywhere

Sure they can. The first $107,600 of earnings, can be excluded from Federal Income Taxes. If you live in a foreign country. Look up the foreign earned income exclusion.

Re: Ask HN: Best USA state to be self-employed in?

#16

Post by garmaine » Thu, Jan 07, 2021, 8:04 PM UTC

emteycz wrote: post #13

garmaine wrote: post #11

Earlier quoted context omitted.

Not true! Google "puerto rico federal income tax" if you don't believe me. https://www.forbes.com/sites/robertwood/2019/09/09/move-to-p... (Despite saying "not exactly" in the title, it is in fact exactly that. Read the details. PR residents don't pay federal income tax. There's just some caveats if you're trying to move there as a tax dodge.)

I thought that applies only to non-US citizen Puerto Rico residents. Seems like you're right, thanks for correction!

Well Puerto Rican born residents are US citizens. The IRS makes it understandably difficult to change your residence to PR as a tax dodge though.

Re: Ask HN: Best USA state to be self-employed in?

#17

Post by dhruvkar » Fri, Jan 08, 2021, 6:26 PM UTC

garmaine wrote: post #11

emteycz wrote: post #9

Earlier quoted context omitted.

A citizen of the US can't avoid federal taxes anywhere

Not true! Google "puerto rico federal income tax" if you don't believe me. https://www.forbes.com/sites/robertwood/2019/09/09/move-to-p... (Despite saying "not exactly" in the title, it is in fact exactly that. Read the details. PR residents don't pay federal income tax. There's just some caveats if you're trying to move there as a tax dodge.)

Only if your source of income is from Puerto Rico.

https://www.irs.gov/taxtopics/tc901

>> If you're a bona fide resident of Puerto Rico during the entire tax year, you generally aren't required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico.

Re: Ask HN: Best USA state to be self-employed in?

#18

Post by techsin101 » Sat, Jan 09, 2021, 7:02 AM UTC

wheresmycraisin wrote: post #3

Have you considered moving out of the country instead? Because you will have to pay federal taxes, which are much more onerous than state. Otherwise, Nevada or other states with good asset protection and low/no state income tax.

you still have to pay taxes to irs - taxes paid elsewhere

Re: Ask HN: Best USA state to be self-employed in?

#19

Post by throwarayes » Sat, Jan 09, 2021, 5:18 PM UTC

I think there are so so many variables it’s impossible to answer this question:

- do you have kids/care about education?

- do you need good internet (assuming yes)?

- do you prefer the city vs suburbs vs the countryside?

- do you care any about the predominant industries of the local economy? Or are you just caring about remote freelancing?

Not to mention considerations of family, friends you want to be nearby. And the culture of the place you live.

If your only consideration is a place to claim residence with a low tax burden and cost of living as a remote freelancer, it’s easy to list those options. If you expect good public services like education and public transportation that’s going to look quite different. If you want to support non profits or work in defense contracting, that’s also very different.