The changed Federal income tax law went into effect 1 January. Its changes will be reflected in the return you file next spring.
One major change is the limitation on the amount of state and local taxes those who itemize can write off against their taxable income. It was unlimited, but as The Wall Street Journal reports, is now limited to $10,000.
My envelope-back calculations suggests any Californian with taxable income over $112,000 will pay more tax than before. WSJ notes that, under the new law, a person making $3 million might save roughly $400,000 by moving to one of the 7 states with no income tax. That is a non-trivial savings.
The Journal observes substantial numbers of high earners can be expected to move from New York and California to, for example, Texas or Florida. Both of these are no-income-tax states with relatively warm winters. Connecticut and Minnesota also have high income taxes.
The seven states with no personal income tax are Alaska, Florida, Nevada, South Dakota, Texas. Washington, and Wyoming. In two more states - New Hampshire and Tennessee - only dividends and investment income are taxed. States listed in case you're interested in exploring options.
