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Most people take tax steps that save a few hundred or a few thousand dollars. Billionaires like Jeff Bezos think big.
according to BenzingaThey reportedly cut their tax bill by nearly $1 billion with one simple move that potentially everyone can take advantage of. No secret tax loopholes, just a simple strategic move.
What did Bezos actually do?
The simple strategy Bezos came up with was to move from Washington state to Florida. Sounds pretty simple, right?
Now you might be wondering how moving from one state to another can help one save a good amount of money. It all depends on the tax rate of the state.
Bezos had been living in Seattle for years and in 2023 he announced he would be moving to Indian Creek Village, Florida, also known as the Billionaire’s Bunker. Florida is one of several states with no state income tax and no capital gains tax. In contrast, Washington has a 7% tax on all capital gains.
Bezos’ reasoning when asked about the move was that he would be closer to his aging parents, but it should come as no surprise that the move was also financially motivated.
Since the move, the Amazon founder has sold approximately $13.6 billion worth of Amazon stock. If he still lived in Seattle, with a 7% capital gains tax, the stock sale would have cost him $952 million. In Florida, their tax bill was $0. This is a significant savings.
why does it matter
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 money from tax-deferred accounts, living in an income tax-free state like Florida can help reduce the taxes you owe.