Talk of The Villages Florida

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-   The Villages, Florida, General Discussion (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/)
-   -   Saying goodbye to state income taxes (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/saying-goodbye-state-income-taxes-321762/)

davephan 07-18-2021 01:02 PM

1 Attachment(s)
Quote:

Originally Posted by Patents111 (Post 1974359)
Hi, I’m a federal retiree living in Virginia. I plan to sell my house; and sell or re-register all personal property in Florida; and buy and become a full-time Villages resident. My local CPA will file my part-year Va taxes, but Virginia had/has a reputation for seeking taxes from former residents on the theory that their retirement income was the result of living in the state while earning that retirement.
I’m interested in hearing your story of settling up with, and disengaging from, your home state tax collecting system whether Virginia or other, what you used as your transition-to-Florida date, and any advice to avoid pitfalls. Many thanks in advance.

Usually when you move from a state that has a state income tax, and sell your property that you owned in that state, the former state doesn't try to continue to tax you with their state income tax. If you become a snowbird and keep your property up north, then you have to be much more careful.

For example, in Minnesota, you have to be gone from Minnesota a minimum of six months plus one day. If you are in Minnesota for one minute, it counts as one day. I don't think it counts if you are at an airport in Minnesota where the starting point and destination is not Minnesota, and it shouldn't count in Minnesota if you fly over the Minnesota airspace. But it would count as being in Minnesota if you drive across Minnesota.

In addition to the six months plus one day rule, there are also 26 other residency consideration factors. These are things like your driver's license. The factors include things like, where your vehicle is registered, insured, and stored, and the information you tell your insurance company. Address where mail is received. Where bank accounts are located. Where you are registered to vote, but casting an illegal vote does not count against you! The state could also ask for your location records from your cellphone company.

New York has a department that's dedicated to going after people who left New York. New Jersey is also has a reputation for going after people who leave New Jersey. But California's proposed taxation rules are the most extreme. California's proposed taxation laws would probably be thrown out by the courts if it ever passed legislation. California wanted the right to force you to pay the California state income tax up to 20 years after you move out of California. At first, this tax would only impact multi millionaires. But if it ever passed, that income threshold would likely drop down, so that everyone who leaves California would have to pay the California state income tax, up to 20 years after leaving California.

Make sure that you take the necessary action to reduce the chance that your former state might attempt to force you to continue paying their state income tax, after you moved from their state. You can also file the declaration of domicile document in your Florida county, which is more paperwork to indicate that you are a resident of Florida. The declaration of domicile document fees are a little over $20.

You should also file for homestead in Florida. Homesteading your property will cap the future annual property tax increases, and it will reduce your property's taxable base.

Tim C. 07-18-2021 01:33 PM

welcome. enjoy our beautiful State and enviable tax policies. if you came from a Blue State, however, please leave Blue State voting habits behind so we don't become a State people want to leave

rjm1cc 07-18-2021 01:47 PM

Moved from NJ but keep my house there for several years. This could have caused a problem but did not.
In Fl got drivers license. Fl takes your old licenses and notifies that state. You can sign up for voting when you get drivers license. After these two steps you should be ok assuming you have a home in Fl.
Since Fl does not have an income tax I would keep my current CPA for a couple of years. That way if a problem comes up he knows you and the state.
By the way my NJ bank was also active in Fl so I did not change banks. But I would try and break every link to your home state. File address changes with IRS and all vendors and PO etc. You should be ok so don't worry if you get letters. Just be sure to dispute.

PugMom 07-18-2021 01:51 PM

Quote:

Originally Posted by J1ceasar (Post 1974715)
NJ hit me for several thousand " moving taxes". Free. At last .

dittos re: Ct., some sort of fine for leaving the state. it was a few grand, then a month later we got a snail-mail letter saying how Ct. 'missed' us & is not too late to change our minds :1rotfl:

OrangeBlossomBaby 07-18-2021 02:09 PM

We left Connecticut in November 2019 (the end of the year). We still owned our house up north, but it was for sale and vacant, though we kept it insured until the closing date in March 2020.

We had to file a CT income tax return and were responsible for taxes on all the income, both hubby's pension and my part-time job. Since we were officially living in Florida the entire year of 2020 (and after), we didn't have to pay any income tax in Connecticut on pensions for the 2020 tax year.

Oddly enough however, we are still paying Connecticut state sales tax on our cell phone bill. This is actually a good thing since Connecticut sales tax is lower than Florida sales tax by around 1/2 a percent.

Ben Franklin 07-18-2021 05:18 PM

Quote:

Originally Posted by Trayderjoe (Post 1974446)
Definitely listen to your CPA.

Note too that in 2017, the Florida requirement to declare Florida for legal residency was that you had to live here full time for 6 months plus one day. You may want to verify if that requirement still exists or has changed. We moved here from Michigan in May, arrived on a Saturday, and on that Monday immediately went down and acquired our Florida driver licenses and registered our cars. We only had to pay state income taxes to Michigan for income through May of that year.

6 months and a day was never a Florida requirement.

kdbaumann11 07-19-2021 11:54 AM

Retiree Account Taxation
 
I believe there may be some confusion regarding what is retirement income. I've not heard of states pursuing taxes on income from "retirement accounts". I do know of states pursuing taxes on "Deferred Compensation". Check with your former employers' HR Department for the classification under which the income was initially reported and under what classification it will be reported going forward.




Quote:

Originally Posted by Patents111 (Post 1974359)
Hi, I’m a federal retiree living in Virginia. I plan to sell my house; and sell or re-register all personal property in Florida; and buy and become a full-time Villages resident. My local CPA will file my part-year Va taxes, but Virginia had/has a reputation for seeking taxes from former residents on the theory that their retirement income was the result of living in the state while earning that retirement.
I’m interested in hearing your story of settling up with, and disengaging from, your home state tax collecting system whether Virginia or other, what you used as your transition-to-Florida date, and any advice to avoid pitfalls. Many thanks in advance.


kdbaumann11 07-19-2021 11:59 AM

Retiree Account Taxation
 
Has nothing whatsoever to do with blue state or red state. It is dependent on how your employer reported it initially and how they report it going forward.


Quote:

Originally Posted by Tim C. (Post 1974967)
welcome. enjoy our beautiful State and enviable tax policies. if you came from a Blue State, however, please leave Blue State voting habits behind so we don't become a State people want to leave


manaboutown 07-19-2021 12:09 PM

Quote:

Originally Posted by Patents111 (Post 1974359)
Hi, I’m a federal retiree living in Virginia. I plan to sell my house; and sell or re-register all personal property in Florida; and buy and become a full-time Villages resident. My local CPA will file my part-year Va taxes, but Virginia had/has a reputation for seeking taxes from former residents on the theory that their retirement income was the result of living in the state while earning that retirement.
I’m interested in hearing your story of settling up with, and disengaging from, your home state tax collecting system whether Virginia or other, what you used as your transition-to-Florida date, and any advice to avoid pitfalls. Many thanks in advance.

In 1986 I moved from Great Falls, VA to another state. I had no income tax problem with VA but since I resided in Fairfax County I had to pay an additional tax yearly on my vehicle registration for which the county issued a windshield sticker. Although I never paid any attention the tax must have been applied in arrears as a few years later I received a bill from Fairfax County with penalties, interest and collection fees tacked on from a law firm and had to deal with that.

By the way, OP, were you by any chance a patent examiner at the USPTO in Crystal City or a government patent attorney? I was an examiner at the USPTO long, long ago.

retiredguy123 07-19-2021 12:15 PM

Quote:

Originally Posted by kdbaumann11 (Post 1975351)
I believe there may be some confusion regarding what is retirement income. I've not heard of states pursuing taxes on income from "retirement accounts". I do know of states pursuing taxes on "Deferred Compensation". Check with your former employers' HR Department for the classification under which the income was initially reported and under what classification it will be reported going forward.

When you contribute to an IRA or 401K, you don't pay either state or Federal income tax on the money deposited. So, if you retire and move to a state that has no income tax, like Florida, you escape the state income tax entirely. But, prior to 1996, several states had laws that required you to pay the state income tax when you withdrew the money from those accounts, because the tax was only deferred, not forgiven. California even sent collection agents to other states to collect the tax. But, in 1996, the Federal Government passed a law that prohibits states from taxing withdrawals from retirement accounts. So, now you can legally escape the state tax by leaving the state.


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