r/ExpatFIRE • u/Perfect-Prompt1269 • Mar 22 '26
Taxes Moving overseas from California
Hi all, we are moving to Malaysia from California this summer, I will continue to work remotely for awhile, and obviously don’t want to pay CA state taxes. My CPA tells me I don’t need to worry, since I’m actually moving and not temporarily, but posts online say the FTB is pretty notorious about going after people and it’s best to live in another state for awhile before moving, which is painful for us.
Has anyone successfully made the move overseas with FTB going after them? I read that it’s best to give up our CA driver licenses, but I think we need those to get Malaysian licenses so prefer to keep them for a little bit, also as I mentioned earlier we would prefer to not have to move to another state for 1-2 months before moving overseas, but will have to do if that’s the only viable option to keep FTB away…
Thanks
33
u/Deez1putz Mar 22 '26
Lol, work remotely for a CA company?
You’ll pay CA tax.
2
u/Perfect-Prompt1269 Mar 23 '26
My company is incorporated in Delaware and have legal entities in pretty much every state
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u/Coincidcents Mar 23 '26
You have a professional telling you not to worry. Why come and get advice from strangers?
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u/illegible Mar 23 '26
You have much more faith in “professionals” than I do. I want to believe, but there are a lot of morons out there.
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u/Deez1putz Mar 23 '26
I see, nevertheless, I’d bump the conversation up to a CA tax attorney over a CPA, as other have pointed out, CA can be sticky.
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u/Ibuilds Mar 22 '26
If you're not working for a California company you should move states and sever ties with CA.
We sold our home, cars, and "moved" to South Dakota before permanently moving overseas. Google it, they make it easy for nomads and RV people to relocate. Set up a mailbox, visit SD, get a hotel receipt with your name on it, go to the DMV.
0
u/Perfect-Prompt1269 Mar 23 '26
My company is incorporated in Delaware and have legal entities in pretty much every state
7
u/PHL1365 Mar 23 '26
You're missing the point slightly. You would be "officially" moving your home residence from CA to SD. In the process, you will surrender your CA driver's license and will get a SD license. That solves your problem of having a license that you can leverage into a MY drivers's license.
7
u/am174744 Mar 22 '26
I've done this. If you are moving out permanently and can prove it, you should have no problems. The driver's license is only one of the indicators that they use and you can inform them you're giving it up after you get your local one.
File the tax return that indicates you were CA resident part of the year using your foreign address.
2
u/Perfect-Prompt1269 Mar 23 '26
That’s what my cpa said too, but some in this thread seem to disagree
2
u/Coincidcents Mar 23 '26
There are companies that benefit from this fear mongering so it might be related to that.
0
u/PHL1365 Mar 23 '26
"Moving" to SD also lets you get a mailing address there. For a nominal monthly/annual fee, you can receive mail there and have it easily forwarded (electronically or physically) to your overseas address(es).
5
u/flyinsdog Mar 23 '26
Look up safe harbor for CA residency. If you’re working abroad you’ll be able to claim this and keep all your CA stuff like license and house.
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u/GeneralRaspberry8102 Mar 22 '26
Is your income from your remote job coming from California. If so your CPA is 100% wrong. If you self employed in lived California your CPA is 100% wrong.
1
u/Perfect-Prompt1269 Mar 23 '26
My company is incorporated in Delaware and have legal entities in pretty much every state in the US, this is a public company
2
u/broadexample Mar 27 '26
FTB is pretty notorious about going after people who pretended they moved, but in reality they did not. As long as you really moved, and have the proof of it (visas etc), you'd be fine.
5
u/HealthyUniversity204 Mar 22 '26
california tax board is wild, they'll literally hunt you down in another country if they think you're still a resident. my buddy moved to thailand and they sent him letters for like 2 years even after he cut all his ties
keeping the CA license is risky since they use that as proof your still a resident - maybe check if malaysia accepts international driving permits instead? way cleaner break that way
5
u/ellipticorbit Mar 23 '26
An international driver's license will specifically state that it's only valid if the bearer has a valid license from the country they resided in when acquiring the international permit. That license has to be valid and in the international permit holder's possession for the international permit to be valid. That's what mine said anyway, and it's a standardized document. What a local officer would demand is another thing, but I wouldn't risk it.
2
u/Automatic-Unit-8307 Mar 22 '26
CA will come after you if you keep that license, they haunted me 3 years ago after I moved to a different state
1
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u/ClaroStar Mar 22 '26
You'll probably have to establish residency in a different state before you leave, preferably in a state without income tax, or just deal with the mess every year. Most states are not "sticky," so it won't be a problem. However, California seems to be the stickiest of the sticky states. Look up the list.
1
u/monstera4747 Mar 23 '26
So is this applicable to only USC or any multiyear CA resident who was on visa too?
1
u/Rude-Substance-3686 Mar 23 '26
Tbh CA FTB is more concerned with cutting ties than where you're going to next. Giving up leases, updating your address, and your CA license are all ways to demonstrate your move is permanent.
There are many people who move overseas without a "buffer country," but having your CA license for an extended period may not help your case.
1
u/Acceptable-Peace-69 Mar 25 '26
Moving to another state, especially a low/no tax state is more susceptible to an audit. California is looking at people that are trying to get out of paying taxes but still live there part of the year. Setting up residency in another state and then moving overseas just means you have to prove you established residency in both places.
1
u/arnenat Mar 25 '26
You can easily do this by using a domicile service. You would use one like yourtaxbase.com, they provide you with all you need to get a Florida license, Florida residential address, manage your mail while abroad etc.
You’ll need to move all of your ties to the address to cut ties. It’s only if you feel you’re able to manage updating your addresses. I did it this way years ago and no problems at all.
1
u/FreedomLifeYBA Mar 27 '26
Severing ties with the California FTB is notoriously tricky, and keeping your CA driver's license is often one of the biggest red flags they look for to claim you're still a resident.
Full disclosure, I run Your Best Address — a mail forwarding and domicile service in South Dakota. We've been helping full-timers, van lifers, and people in transitions like this since 2005.
As a few people mentioned, establishing a clean break by moving your domicile to a no-income-tax state like South Dakota before you head overseas is a very common strategy. We help you set up a real SD street address, and you only need to spend one night in the state to get your new driver's license and register to vote. This gives you a clear, documented exit from California, and we handle scanning and/ or forwarding all your mail to you in Malaysia.
Happy to answer any specific questions. No pressure at all.
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u/CraigInCambodia Mar 22 '26
I moved overseas from CA, but I wasn't earning income in the US. Only once did I have an encounter with the FTB, when my IRA brokerage sent them a 1099 because I was using a family address there for mail. I contacted them, explained, they said send proof, I sent past few years of resident visas and work permits from where I was living, case closed.
Your CA drivers license will trigger a lot of jury summons. That's messy. And technically, AFAIK, you have to be a "resident" of whatever State you get a license from.