Broker Check

Should You Become a Florida Resident? Part II

| June 20, 2016
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Our last article described the many financial benefits potentially available to those who decide to become Florida residents – in addition to all the other amenities that make this a great state in which to live. If you have consulted your tax, legal and/or financial advisors on this, and have concluded that becoming an official Florida resident is the right move for you, here is what you need to know and do. 

Here are some questions you may first need to answer and understand as you become a Florida resident:

1. What is domicile?

  • Domicile is defined as actual residence within a particular state combined with the intention of making that state one’s permanent home. In order to establish a new domicile, you must first abandon your old domicile but not necessarily your old residence. The basis of domicile rests on the intent of the individual to claim domicile, or permanent residence, in a new state. One may own another residence in another town, city, or state, but the benefits of residence can have an impact on your taxes, especially if you owe income tax in another state.

2. How long do I have to live in the state to be considered a resident?

  • Every state has its own set of rules about this, but the best advice is to simply count the number of days spent in that state in a given year. If you have spent more than 183 days in a given state, you will likely be considered a resident of that state for tax purposes.
  • Remember that auditors are likely to presume that most people spend more time at home than away.

3. Do I have to own property?

  • You may own property in any state, but not be considered a full time resident of that state until you pay income taxes or spend time over a given threshold, usually half of one year or more than 183 days. This means that if you spend 183 days or more in a rented property in South Carolina, but you own what you consider to be your primary residence in Florida, you may still be required to pay additional taxes in the state of South Carolina that year. 

4. How will I be affected by out of state taxes?

  • If you still own a business or own land in another state and in Florida, you will have to pay property taxes in that state as well as in Florida.
  • If you have investments that generate income in more than one state, you may have to report and pay state income taxes to those other states on that investment activity, regardless of whether or not you are a Florida resident.
  • You may also be taxed on your income by another state if you work outside the state of Florida and spend more than half of the year in that state.
  • Since other states are becoming more aggressive in how they pursue collecting income tax, it’s always a good idea to consulting your tax advisor about how your activities outside of Florida will affect your tax situation after you become a Florida resident.

5. What if I am a dual citizen?

  • Taxes may affect you in many complicated and nuanced ways if you own property or generate income in another country. It is highly recommended that you speak to a well-qualified tax attorney or wealth advisor with experience with dual citizens in order to serve your needs.

Here are the steps to becoming (and proving you are) a Florida resident: 

  • Purchase property in the state of Florida and utilize it as your primary residence.
  • File a Declaration of Domicile in the Circuit Court in the county of your new residence in order to back up any claim of your intent to become a full time resident.
  • Register to vote in Florida.
  • Register your vehicle in Florida and obtain a Florida license plate.
  • Obtain a Florida driver’s license.
  • Surrender your previous states’ license plates and driver’s license.
  • Change the title of your vehicle in Florida if you decide to buy a new car.
  • File Federal Income tax returns using an address in the state of Florida.
  • Have new estate documents drafted and notarized in the state of Florida.
  • Use your Florida address for all mailing and registration purposes.
  • Establish a relationship with a stockbroker or wealth advisor in the state of Florida.
  • Establish a relationship with a doctor or physician practicing in the state of Florida.
  • Change the mailing address on all your brokerage and bank accounts to the state of Florida.
  • Close any safe deposit boxes you may have in your old state.
  • Sell off any real estate property you may own in another state or transfer the title to a Florida LLC. 

Source: http://www.kwgd.com/should-a-snowbird-establish-florida-residency

After reviewing the information contain in this series, if you have any further questions, we encourage you to consult your tax or legal advisor, or, as your concierge financial services provider, let us help you find the answers. We welcome the opportunity to serve you in your transition to becoming a Florida resident, and welcome you as our new neighbor. Congratulations!

 

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