Financial Benefits of Moving to Florida
Moving to the Sunshine State has more benefits than just swapping out cold winters for year-round warm weather and beautiful beaches. Florida’s tax incentives are just as attractive for remote workers and retirees looking to live in a state that improves their tax position.
Moving to Florida
Relocating to Florida is about more than buying a house and calling it good. To qualify for tax benefits that the state offers, such as no Florida state income tax, you need to establish it as your domicile. This is what proves your status as a resident of the state.
You can own multiple homes but can only retain one domicile. What this means is that you reside in your Florida home indefinitely, and while you may leave for various reasons, this is the primary home to which you return. This can be ambiguous to determine but, in many cases, a state tends to look at the characteristics of the home, your business and personal involvements in the state and the length of time you spend at your home. Other factors include proof of voter registration or a Florida driver’s license.
People love this state for many reasons, from its coastal towns to its rich history. One of the major advantages is that Florida is a more tax-friendly state. The sales tax in Florida sits at around 6%, there is no state income tax, estate tax, intangible goods tax or inheritance tax. There are also various tax exemptions for which you may qualify. These are all great benefits, especially for high earners who are looking to save more money. Read more here to learn about relocating to tax-friendly states.
Understanding Florida Retirement
An aspect of living in Florida that may have stood out to you is the part about no state income tax. This makes it one of the best states for retirement taxes also, since many of the common sources of cash flow during retirement would otherwise be taxable income. Social Security, public or private pensions and income you receive from retirement accounts, such as your IRA or 401(k), are not subject to state income tax.
In addition, with no estate or inheritance taxes, Florida retirement taxes will barely make a dent in your income, making it much easier to relax and enjoy your surroundings.
Those who are interested should do their research ahead of time. It’s not as quick as declaring Florida your new home—you also have to prove it. Here’s a quick Q&A video going over the basics when considering a move to a tax-friendly state.
Like the video mentions, you’ll need to show that you spend more than half the year in Florida. You can do this by keeping a log that shows when you’re in the state. In addition, go through all the steps that show you’re serious about living in the state. Register to vote, apply for a library card, change your driver’s license and car registration, find health care providers, open local bank accounts and frequent shops, and file a Declaration of Domicile with your county court.
If you are considering a move to Florida, be sure you understand what you need to do to establish domicile in Florida by downloading our checklist.
The views expressed are for commentary purposes only and do not take into account any individual personal, financial, legal or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. The opinions are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information.
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