In addition to the environmental attractions of Florida, moving your primary residence to Florida has numerous advantages. Primary among them is partial or total freedom from state income taxes and state estate taxes. If the transition is total, then the result is both tax beneficial and straight forward. As the following list will reflect however, there are many factors which could impact how “total” this transition might be.
The most significant test applied by states who might claim ongoing tax benefits from you is whether or not you sold your primary residence in your prior state or not. If you did, your transition from your prior state becomes more clear. IF not, there are considerations to address to build a good argument that you have “moved”. The following will address some of the considerations important to any final determination.
Avoid spending significant amounts of time in your prior state of domicile. It could be a problem for you if you or your spouse spend more than 183 days a year in your prior state. Leaving and returning on trips or vacations from Florida is an important consideration as travel time can be allotted to either state. Use a Florida travel agent and purchase your travel arrangements using a Florida registered credit card or checkbook.
Request a “Declaration of Domicile” from your Florida county Clerk of the Court.
Register to vote in Florida and remove your name from the voting rolls of your former state.
Obtain a Florida driver’s license and surrender your license from your former state. Register and insure your car(s) and other vehicles in Florida.
File a claim for Homestead Exemption for your new Florida residence.
Open a Florida bank account and close your account in your former state. Change the address of record on your credit cards and pay your bills from your new Florida bank account. Have regular deposits such as social security, pension, annuity and other payments directed to your Florida bank or investment account
Move your securities and investment accounts to a brokerage firm branch or a firm based in Florida.
File your federal income tax returns from your Florida address and file a final state tax return to your former state.
Modify wills, trusts, healthcare directives, living wills and other documents to reflect actions to be taken in accordance with Florida laws.
Discontinue resident status in social, religious and civic organizations and clubs in your former state and have non-resident status noted in their records and address references.
Form as many new professional relationships as possible in Florida. These might include medical, dental, accounting, financial and legal services.
Reduce or end active business relationships and responsibilities in the former state. Real estate and other business assets in your former state of other states will remain subject to tax.
Change the address on your passport and social security card to your Florida address.
The above list is not exhaustive but will create a very strong defense should your former state attempt to claim that they have a basis to pursue resident-based tax and other obligations.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors at RJA, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Opinions expressed in the attached article are those of the author and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.