Most people make tax moves that save a few hundred or even a few thousand dollars. Multibillionaires like Jeff Bezos think bigger.
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According to Benzinga, he reportedly cut his tax bill by nearly $1 billion with one simple move that everyone could potentially take advantage of. No secret tax loophole, just a simple strategic move.
The simple strategy Bezos put in place was to move from Washington state to Florida. Sounds pretty simple, doesn’t it?
Now you might be wondering how moving from one state to another can help someone save a substantial amount of money. It all comes down to the state’s tax rate.
For years, Bezos had been living in Seattle, and in 2023, he announced that he would be leaving for Florida’s Indian Creek Village, also known as Billionaires’ Bunker. Florida is one of several states that has no state income tax and no capital gains tax. In contrast, Washington has a 7% tax on all capital gains.
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While Bezos’ reasoning, when asked about the move, was to be closer to his aging parents, it shouldn’t be much of a surprise that the move was financially motivated, as well.
Since the move, the Amazon founder has sold around $13.6 billion worth of Amazon stock. Had he still lived in Seattle, with its 7% capital gains tax, the stock sales would have cost him $952 million. In Florida, his tax bill was $0. That’s a pretty significant savings.
While most people aren’t facing billion-dollar tax bills, this example highlights how simple changes, such as where you live, can affect your finances. As retirees begin withdrawing funds from tax-deferred accounts, living in an income-tax-free state like Florida can help reduce the taxes you’ll owe.
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This article originally appeared on GOBankingRates.com: Jeff Bezos Cut $1 Billion From His Taxes by Doing This Big Money Move
