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Old 08-27-2015, 12:21 PM   #21
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Originally Posted by harley View Post
That document only lists MD's state tax. Each county also adds a piece, as do some of the cities.
As I've demonstrated elsewhere in this thread, my information is dated and/or my memory foggy. But I believe the two counties I lived in (Montgomery and Baltimore, at different times) had a 50% piggyback on the state income tax. I think some counties were 55%.

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Old 08-29-2015, 01:40 PM   #22
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Welcome to the forums, aknowhow!
Originally Posted by aknowhow78 View Post
Also what happens if we don’t sell our home in MD before I retire?
We greatly appreciate any assistance with this.
Right now you can show that your MD home is your primary residence and your FL home is a rental property.

When you retire, you have to become a resident of a state. There are various ways to declare your domicile, but if you retire in MD and still have ties to the state (MD real estate, your spouse's MD job) then about 30 days later they're going to decide you're a MD resident. It's a tug-of-war between the two states (and two sets of tax returns) to decide which place you pay what taxes.

You want to sell your primary residence while you're still on active duty and still a FL resident. That way you can roll over the capital gains into another residence in FL (keeping your FL rental as a rental) or even pay the taxes. It'll be a lot easier to handle that as a FL resident. Then when you retire, you're just a FL tourist in MD for a few weeks.

If I were in your situation, I'd put the MD home on the market as soon as you reach your last day in the office or whenever (before you retire) you pack out your household goods.

As a servicemember you have a certain number of years to roll over the cap gains from the sale of a primary residence, but once you retire then you may no longer qualify for that option. The only thing I'm sure of is that MD will tax you more harshly than FL no matter what you decide to do with the capital gains.

Another option would be to move back into your FL residence for two years to convert that back into a primary residence. But again it might make more sense to leave it as a rental property while you choose the primary residence you really want.

If your spouse is working in MD after you're retired from active duty, then he's a FL migrant laborer working in MD and he'll owe taxes to MD (and the county). He has to reeeeeally love the job to pay those taxes. Maybe the situation will change over the next few years and he'll find a way to both live and work in FL... assuming that he still cares to work.


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