Federal Tax Code Changes Increase People Moving to Florida
The latest round of federal tax code changes is causing a surge in people moving to Florida. A significant reason is that Florida does not have state income tax like California, Connecticut, and New York. With the recent tax changes, residents can no longer deduct all their state and local taxes (SALT) on their federal income tax. New tax limitations lead to higher income tax payments due to the maximum $10,000 itemized deduction. The combination of real estate taxes and state income tax could easily be over $50,000 and well into the six digits for many residents now forced to deduct only $10,000.
The state of Florida has requirements for establishing tax residency. You cannot just buy a home here and declare yourself a resident. There are steps you must take to establish Florida residency if you want to offset the federal tax code changes and keep more money in the bank rather than giving it to the IRS.
Another benefit of moving to Florida – the cost of living here is lower than in many of the states with local income tax requirements. Living in Florida can save you money on day to day life as well as on your taxes.
Steps to Take to Establish Florida Residency
You need to be extremely careful about your reason for living in Florida. If the sole purpose is to avoid paying taxes, you could be in for some hefty penalties if you do not establish proper residency. The legal term for this is “establishing domicile,” and it requires you to show proof of intent to make Florida your home.
Here is what you need to know and do to establish domicile in Florida:
Whether you choose Coral Springs or Parkland as the best place to live in Florida, you will be happy that you are here. Leave the snow shovel up north, and keep more money in the bank. Enjoy great year-round weather, friendly people, and a high-quality lifestyle here in South Florida.
Do not let the federal tax code changes affect your bottom line. You have options. Another consideration for many people is estate, inheritance, and gift taxes imposed in states with local taxes. Florida does not impose these taxes, so your recipients will also benefit.
If you no longer work, by far, the best place to retire in Florida is right here. The financial savings can significantly alter your retirement quality of life. Just remember this – states with local taxes will require proof that you no longer reside there, especially if you maintain a home for visiting. You must complete the steps listed above to prove Florida residency.
For help finding the perfect new home, contact the team at Great Florida Homes at (954) 695-SOLD. We are here for you.
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