Did you just relocate to North Carolina with your company?
Financial, Tax, and Lifestyle Tips for Corporate Professionals
Financial and Tax
If your company recently moved its headquarters or established a new office in North Carolina and you have been asked to relocate to the Tar Heel State, you probably have countless questions. A corporate relocation can be both exciting and stressful as you consider which neighborhoods fit your unique preferences, should you rent or buy, what is the cost of living difference, where the best schools are, and more.
We hope that this paper will help you make your transition to North Carolina as smooth as possible, and help you consider some issues that may not have been top-of-mind.
Understand North Carolina & South Carolina’s Income Tax Structure
North Carolina’s income tax rate is currently 5.25%. If this rate is higher than the state in which you resided, there may be an opportunity to recognize some income (e.g., realizing capital gains in your portfolio or exercising stock options) before you move. This is a topic you may want to proactively explore with a CPA as certain states have recapture rules whereby if you earned income while working in State A and move to State B before the income is paid out to you, State A can argue that they have a claim to their share of the tax burden. Before you decide to recognize a sizable amount of income, be sure to consult with a CPA who is familiar with North Carolina and your prior home state.
Because Charlotte is situated close to South Carolina, living in South Carolina while working in North Carolina is also an option. If this should apply to you, you will need to file a state tax return in North Carolina as a non-resident as well as file a South Carolina resident tax return because South Carolina taxes its residents on all income regardless of the state of origin. South Carolina offers its residents a state income tax credit for North Carolina taxes paid – given this, it is important to first calculate your North Carolina tax liability. South Carolina has a progressive state income tax structure with its top tax rate topping out at 7%. While South Carolina’s income tax rate is higher than North Carolina’s, South Carolina residents often pay less in real estate property taxes.
Because your take-home paycheck, assuming the same salary, may be higher or lower than your prior paycheck given the difference in state tax rates, you should consider doing some quick math before you sign your relocation package. Other important considerations include the cost of living differential and how, if at all, your relocation package compensates you in the event that you will be experiencing a cost of living increase. If needed, you can consider negotiating a higher salary to at least keep pace with your projected after-tax living expenses.
Cost of Living and Education
Cost of living is often a major component within an employee’s relocation package. In addition to understanding housing and recreation costs, you may also need to understand the education landscape as well.
Private school tuition can be a substantial budgetary item for any family, and if you have never had to pay it before, you will want to proactively budget for this new cost and consider how the tuition costs and expenses will be paid. Also, there is always the option of enrolling your children in North Carolina’s public-school system or possibly homeschooling your children. If sending your children to private school is preferred, you will want to research the various private schools in the area to account for overall tuition costs, location, overall fit based upon preferences such as religious affiliation, etc. From a purely financial perspective, developing an understanding of your annual education costs is important because it may influence where you live and how much you can afford to spend on a new home aside from the potential impact on your overall lifestyle (i.e, impact on entertainment and travel budget). Presently, there are more than 80 private school options in Charlotte with private high 1school averaging $14,000+ annually.
North Carolina also offers other educational options such as charter schools, magnet schools, and the North Carolina Virtual Public School. For more information, please visit North Carolina Department of Public Instruction’s website at https://www.dpi.nc.gov/.
Consider North Carolina’s National College Savings Program (529 Plan)
Saving for college to help alleviate the escalating costs of higher education is a major goal for a lot of working families and contributing to a 529 plan is a common education savings investment vehicle. Unlike the majority of states today, where the full or partial 529 plan contribution is deductible for state income tax purposes, North Carolina is one of a handful of states with no state income tax deduction benefit. Even though there may not be an upfront tax benefit for contributions to a NC 529 plan, the proceeds within a 529 plan still have a chance to grow tax-free and be withdrawn without any tax consequences so long as the proceeds are used for qualified education expenses.
If your child would like to pursue their college education in North Carolina, it can be helpful to know that North Carolina residents can benefit from the Fixed Tuition Program. Assuming the enrollment requirements are met, the Program affords college students attending a UNC system university the ability to complete their four/five-year program of study without experiencing any tuition increases. Universities participating in this program include, among others, the University of North Carolina at Chapel Hill, Appalachian State University, UNC Charlotte, and East Carolina University.
Review Your Estate Plan
It is always a good idea to revisit your estate plan upon moving from one state to another. One reason for this is because North Carolina may have different estate laws than your previous home state. For example, North Carolina does not have a state estate or inheritance tax like many other states. Additionally, it is important to update your financial powers of attorney, medical directives/ living wills, and estate planning documents such as your will and revocable living trusts to ensure your documents comply with prevailing law. Finally, you should revisit and amend, as needed, your fiduciary appointments within your estate planning documents such as the executor of your will, successor trustees named within your trust agreements, and guardians of minor children. While the previously named individuals may still be capable and willing to serve when their help is needed, it can certainly be a more challenging task to carry out one’s duties and responsibilities while being separated by hundreds or perhaps thousands of miles.
Your investment strategy may also need some fine tuning. For example, if you own municipal bonds in your portfolio that are tax-exempt with respect to your prior state of residence, they may not be in North Carolina. One option for you to consider is potentially swapping out of them and purchasing North Carolina municipal bonds. While we do not advocate that taxes should drive investors’ investment strategy, an investment portfolio should be constructed with a mindfulness of tax-efficiency.
Ask for Introductions
After reading this paper, you may find yourself looking for new tax, financial, and/or legal advisors. One option is to talk with your new coworkers or neighbors for introductions to potential new tax, financial, and/or legal advisors. One of the best ways to find a qualified professional is to ask trusted friends or colleagues in a similar job type this question: “As things relate to financial planning, whom have you had a good experience working with in the past?”
If you want to do your best to blend in to your new surroundings, it is probably important to know that Charlotte refers to its downtown area as “Uptown.” There are numerous online articles describing the reasons for this. In short, the origins of the “Uptown” name are rooted in the topography of the local area as well as a city proclamation dating back to the 1970s.
The metro Charlotte area offers many family-friendly suburbs as well as neighborhoods that can appeal to a broad range of interests and lifestyles.
North Davidson, often referred to as “NoDa,” is currently Charlotte’s historic arts and entertainment district, and it was previously home to textile manufacturers and homes for mill workers. Plaza Midwood is among the most diverse and eclectic neighborhoods in the area, offering a variety of things to do, see, and drink. The neighborhood features thrift shops adorned in graffiti, historic homes, and a wide variety of restaurants and local breweries. For those that prefer lake living, ”Lake Norman and Mountain Island Lake are located north of the Queen City and Lake Wylie is situated southwest of the city, flanked by the North Carolina and South Carolina state borders.
In terms of the residential real estate market, the demand for housing in metro Charlotte has outpaced supply. According to World Population Review, “Charlotte is currently the third fastest-growing major U.S. city,” and if “its population growth continues, Charlotte’s population is set to surge by 47% from 2010 to 2030.” 2In the last couple of years, the Queen City’s population grew at a pace of 90-120 people a day. 3Due to the strong population growth, hopeful homeowners should not be surprised if there are multiple other offers and perhaps a bidding war.
The cost of housing in Charlotte can vary significantly. Unsurprisingly, a big determining factor is location. According to Realtor.com, the median sale price of homes sold in Charlotte in May 2020 was a little more than $275,000. In 2019, the Charlotte Business Journal highlighted zip
code 28207 as the most expensive zip code in North Carolina. This area encompasses the Myers Park and Eastover neighborhoods.
In search of more affordable housing, lower taxes, and great schools, more and more families are migrating to South Carolina. York County, located southwest of Charlotte on the state line, is home to some of South Carolina’s best public schools.
Commuting to and From Work
As the area becomes more densely populated and the city sprawl continues, it is important to give some thought to your daily commute to and from work. A 2019 study by the transportation firm, INRIX Inc., reveals that Charlotte is the 24th most congested city in the country, and Charlotte commuters lost approximately 49 hours per year due to traffic congestion. Among the top 25 congested cities in the United States, Charlotte experienced one of the largest year-over-year “hours lost to congestion” increases (14%) between 2018 - 2019.
The ever-expanding Lynx Light Rail, Charlotte’s light rail transportation option, has more than 19 miles of track and runs from the Interstate 485 terminus up to the University of North Carolina at Charlotte campus. There are currently 26 stations along the line with future expansion to the Charlotte Douglas Airport. For more information about the Lynx Light Rail, visit www.charlottenc.gov.
Charlotte Douglas International Airport (CLT)
Charlotte Douglas International Airport (CLT) is named to honor a former Charlotte mayor, and today the airport is currently one of the busiest in both the U.S. and the world. In 2019, the airport itself reported that it had more than 50 million passengers in 2019 making it the 11th busiest airport in the United
States ranked by passenger traffic. Charlotte Douglas International Airport is a hub for American Airlines and serves approximately 175 nonstop destinations across the globe. For more information about Charlotte’s airport, please visit www.cltairport.com as well as download the airport’s app, CLT Airport.
Charlotte’s Food and Craft Beverage Scene
There is no shortage of fantastic food options in Charlotte as well as a slew of new eateries, breweries, and bars opening every day, hosting some of the country’s top chefs, mixologists, and bakers.
Some of the area’s marquee annual events showcasing the best local restaurants include:
- Queen’s Feast: Charlotte Restaurant Week showcases more than 100 of the metro-Charlotte area’s best restaurants in January and July.
- Taste of Charlotte, held each September, is a three-day food festival featuring more than 100 top area restaurants and includes performances, live music, and activities for the whole family.
A sampling of the Queen City’s destination-worthy restaurants in the area include:
- Peppervine - seasonal local ingredients prepared with global influence
- The Stanley - locally sourced food served in a neighborhood atmosphere
- Good Food on Montford - creative American small plates in a trendy spot
- Dogwood Southern Table - serves Southern eats made with local ingredients in a rustic space
- Habberdish - inventive Southern comfort food
- Price’s Chicken Coop - takeout only staple since 1962
- Optimist Hall - a hip site with a wide variety of food and bar stands plus art, music, and outdoor seating
- Sulffolk Punch - a coffee bar, brewery, eatery, and fermentation lab all in one
- Stagioni - a cozy eatery featuring a seasonal menu highlighting modern takes on classic Italian
If you enjoy cooking, Charlotte offers some outstanding farmers markets in Cotswold, NoDa, and Uptown, as well as the expansive Charlotte Regional Farmers Market near the airport.
Charlotte is home to more than 30 breweries, and over a dozen are within walking distance of one another in the NoDa and Southend areas. Many breweries are family and dog friendly, so they can be a great place to hang out and relax with family and friends.
Some of the area’s most popular craft breweries include:
- The Olde Mecklenburg Brewery
- Heist Brewery and Barrel Arts
- Brewers at 4001 Yancey
- Catawba Brewing Company
- Devils Logic Brewing
- NoDa Brewing Company
- BirdSong Brewing
- Wooden Robot Brewery
- Sycamore Brewing
- The Unknown Brewing Company
- Lenny Boy Brewing
Family, Arts, & Cultural Activities
Charlotte has professional football and basketball teams, and Charlotte FC, the area’s MLS expansion soccer team, is slated to debut in 2022. Bank of America Stadium serves as the home stadium for both the Carolina Panthers and Charlotte FC, and the Spectrum Center serves as the home court for the Charlotte Hornets.
Charlotte is also home to the Charlotte Motor Speedway, which hosts NASCAR races such as the prestigious Coca-Cola 600 on Memorial Day weekend, the NASCAR All-Star Race, and the Bank of America Roval 400.
The Wells Fargo Championship, a perennial PGA tour golf tournament hosted at Charlotte’s own Quail Hollow Club, attracts some of the top PGA tour players and is held in May each year.
Fun Things to Do and Places to Visit
Charlotte has plenty of activities to offer people and families of all ages. Below are some of the top things to do and places to visit in the metro-Charlotte area:
Billy Graham Library
The Billy Graham Library is the “#1 thing to do in Charlotte” according to TripAdvisor. Situated on more than 20 acres, the Library also honors Billy Graham’s childhood architecturally, resembling a dairy barn because Graham grew up on a dairy farm.
U.S. National Whitewater Center
This premier multi-purpose outdoor recreational center offers whitewater rafting, canoeing, kayaking, rappelling, rock climbing, ziplining, and more. For more information, visit www.usnwc.org.
NASCAR Hall of Fame
The Hall of Fame Museum honors NASCAR’s history and most celebrated drivers. For more information, visit www.nascarhall.com.
Daniel Stowe Botanical Gardens
This all-seasons garden spans 380 acres on the banks of Lake Wylie, offering spectacular gardens, fountains, a tropical plant conservatory, nature trails, and visitor pavilion. The annual Christmas Lights at the Garden event is a perennial “must attend” event for many in the local area. For more information, visit www.dsbg.org.
Bechler Museum of Modern Art
This museum is one of only two museums in the US designed by Mario Botta. The Museum houses a large collection of mid-20th century art by Miro, Giacometti, Picaso, Calder, Hepworth, Warhol, and many others. For more information, visit www.bechtler.org.
Charlotte Symphony Orchestra
Charlotte’s hometown orchestra hosts a series of outdoor performances at Symphony Park, an outdoor pavilion nestled in the SouthPark neighborhood. The orchestra’s performances are very popular, and attendees often bring a picnic blanket as well as their food and beverage of choice while listening to music under the stars.
The 407-acre thrill ride theme park also features a 27- acre water park known as Carolina Harbor. For more information, visit www.carowinds.com.
This hands-on museum is focused on science, technology, and nature that will keep children and adults entertained for hours. For more information, visit www.discoveryplace.org.
Vacation and Weekend Destinations within Driving Distance
Someone once said that “life is better in flip flops” ... or perhaps in hiking boots or no shoes at all! After a long week at the office, local residents have numerous vacation and weekend destinations within reasonable driving distance from Charlotte.
Coastal & Lake Destinations
- Charleston, SC – Charleston has been a perennial recipient of Condé Nast Traveler magazine’s “top city” and the number one small city in the U.S. Charleston is a quick 3-hour drive from Charlotte.
- Savannah, GA – Savannah, known for its idyllic Spanish moss and oak trees, is sure to charm, offering rich history, beautiful coastlines, riverboat cruises, and lots of southern hospitality. Savannah is approximately 4 hours away.
- Outer Banks, NC – The Outer Banks or “OBX,” featuring 100+ miles of shoreline and beaches, is a popular family beach destination and it is also home to the popular Spanish mustangs which have lived in the wild for hundreds of years. OBX is approximately a 6-hour drive from Charlotte.
- Hilton Head Island, SC – Often referred to as one of the top 10 family beaches in the U.S., Hilton Head Island is approximately four hours drive from Charlotte, providing relaxation, tremendous golf options, and a laid-back vibe.
- Asheville, NC – Asheville offers a little bit of something for everyone and has a thriving food, arts, and entertainment scene. Popular tourist attractions include the Biltmore Estate, hundreds of beautiful waterfalls, hiking trails and lookout points, Lake Lure, and festivals that appeal to a wide range of interests. Asheville is a short 120-minute drive from Charlotte.
Boone, NC – The NY Times has described Boone as a “gem of a college town in the heart of Southern Appalachia”. Local attractions include several
high country destinations such as Grandfather Mountain’s mile-high swinging bridge and an opportunity to take a nearby detour on the Blue Ridge Parkway. Boone is just a two-hour drive from the Queen City.
- Lake Jocassee, SC – Approximately 3 hours away, Lake Jocassee is a great fit for the family that enjoys spending some time on the water. A quick glance of travelers’ reviews on TripAdvisor tells you everything you need to know about this beautiful lake which features beautiful blue water, waterfalls, and more.
If you are simply looking for a change in urban scenery, there are several nearby city destinations worth a trip: 1) Nashville, TN (6.5 – 7hr drive), 2) Atlanta, GA (4hr drive), 3) Washington, D.C. (6hr drive), and 4) Louisville, KY (7.5 – 8hr drive).
On behalf of our entire team at McGill Advisors, a division of Brightworth, we would like to welcome you to your new home. We are here to answer your questions, and it is always a pleasure to simply be able to say “hello”.
3https://www.bizjournals.com/charlotte/news/2020/03/26/charlotte-metros-population-keeps-climbing- new.html#:~:text=Its%20annual%20numeric%20increase%20of,the%20nation’s%20384%20metro%20 areas.&text=When%20looking%20at%20the%20past,most%20of%20its%20U.S.%20counterparts
Who Are McGill Advisors, a division of Brightworth?
McGill Advisors, a division of Brightworth, is a nationally recognized and fee only wealth management firm with offices in Charlotte, NC and Atlanta, GA. The firm has deep expertise across its financial disciplines which allows its professionals to provide ongoing and comprehensive financial advice to families across the country.
This information is provided as a guide to assist you in your financial planning. The specific examples are provided for illustration purposes only and are not representative of specific investments or guarantees of future returns. Please consult with a professional for specific questions regarding your particular situation.