Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is FL residency worth it?
Old 07-11-2016, 05:51 PM   #1
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 65
Is FL residency worth it?

I'm retired and considering changing my state of residence from Ohio where I pay about 4% income tax, to Florida with no income tax. My Ohio tax is about $15K / yr. This does not include my wife's income or Ohio tax.

My DW would continue to live and work in Ohio. I would continue to travel and stay with her, but fulfill the legal requirements to maintain residency in Florida.

To me it seems that it would be better to stay in Ohio and pay the tax, because it would cost more than $15k to establish a residence in Florida.

Am I missing something? It doesn't seem financially better to move to FL.
__________________

__________________
trapperjohn is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-11-2016, 05:56 PM   #2
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 3,473
plus hurricane risk
__________________

__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 07-11-2016, 06:32 PM   #3
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 1,275
Unless you have a desire to live there, I can't imagine why you would go to all that trouble.
__________________
Ready is offline   Reply With Quote
Old 07-11-2016, 06:33 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,797
If $15K is 4% of your income then $15K is pocket change. I wouldn't bother changing residency.
__________________
aaronc879 is offline   Reply With Quote
Old 07-11-2016, 08:14 PM   #5
Thinks s/he gets paid by the post
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 3,978
Quote:
Originally Posted by aaronc879 View Post
If $15K is 4% of your income then $15K is pocket change. I wouldn't bother changing residency.
I agree. That says you're making $375K. Is $375K rather than $360K (minus fed taxes in both cases) worth it?

I thought you have to spend more time in FL than any other state to be considered a resident, or is that not true? A friend of mine got legal advice on establishing residence in a tax-free state, and one piece of advice was to cut all ties with your former state, including selling all property. Your wife staying in OH does not seem to fit. Maybe you'll get away with it, but again, for 4%, do you want to risk getting charged with tax fraud? Or go through all the work so that it's not tax fraud?

If you like the idea of living part of the time in FL, that's a different story.
__________________
RunningBum is online now   Reply With Quote
Old 07-11-2016, 08:18 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,797
Quote:
Originally Posted by RunningBum View Post
I agree. That says you're making $600K. Is $600K rather than $585K (minus fed taxes in both cases) worth it?

I thought you have to spend more time in FL than any other state to be considered a resident, or is that not true? A friend of mine got legal advice on establishing residence in a tax-free state, and one piece of advice was to cut all ties with your former state, including selling all property. Your wife staying in OH does not seem to fit. Maybe you'll get away with it, but again, for 4%, do you want to risk getting charged with tax fraud? Or go through all the work so that it's not tax fraud?

If you like the idea of living part of the time in FL, that's a different story.
My math says it makes his income $375K? Either way....
__________________
aaronc879 is offline   Reply With Quote
Old 07-11-2016, 08:35 PM   #7
Thinks s/he gets paid by the post
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 3,978
Quote:
Originally Posted by aaronc879 View Post
My math says it makes his income $375K? Either way....
It sure is! I thought I was good with numbers. I've fixed my post. Thanks!
__________________
RunningBum is online now   Reply With Quote
Old 07-11-2016, 08:56 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: Florence, AL/Helen, GA
Posts: 1,415
You can be a Floridian--when it's time.
__________________
Bamaman is offline   Reply With Quote
Old 07-11-2016, 09:14 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 1,991
Note in addition having spouses with different states of residence makes doing income taxes more complex even if one state does not have an income tax. Your federal return would be joint and her Ohio return would have to be single. How you divide income on jointly held assets would be a big problem.
__________________
meierlde is offline   Reply With Quote
Old 07-12-2016, 05:47 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Posts: 6,692
Quote:
Originally Posted by meierlde View Post
Note in addition having spouses with different states of residence makes doing income taxes more complex even if one state does not have an income tax. Your federal return would be joint and her Ohio return would have to be single. How you divide income on jointly held assets would be a big problem.
Ohio requires you to file joint if your Federal return is joint.
__________________
braumeister is online now   Reply With Quote
Old 07-12-2016, 06:22 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 6,756
On top of the above, unless your ultimate plans included her joining you real soon in FLA on a permanent basis I see how no savings occurs at all in this scheme when accounting for frequent travel to visit, additional costs of a second place, utilities, etc.
While on a lower scale of about 100k in yearly income, I did some number checking. I live in a 6% state income tax and found moving to FLA would save me no money at all when using complete honest math.


Sent from my iPad using Tapatalk
__________________
Mulligan is online now   Reply With Quote
Old 07-12-2016, 06:22 AM   #12
Full time employment: Posting here.
 
Join Date: Jan 2014
Posts: 540
Research how full-time RV'ers establish FL domicile without owning land or renting. There are mail forwarding services that will walk you through the process at a low annual cost.
Example: https://www.sbimailservice.com/index.html

I researched this from the angle of a single person.

When you apply for a FL driver's license you also register your vehicle in FL and FL auto insurance rates are higher than my current location. You pay the FL sales tax rate when you buy a new car.

At a minimum, my current property tax and homeowner's insurance would increase as it would be listed as a vacation home. I would lose the savings associated with it being a primary residence.

Would you be comfortable with income tax, financial and utility companies listing your physical address as one provided by the mail forwarding business?

I assume your health insurance coverage is through Medicare or your DW employment and you would still qualify. If you have an exchange plan, you would be required to purchase a FL exchange plan. If it were an HMO, routine care in Ohio could be out-of-network and emergency care could be balanced billed.
__________________
MBSC is offline   Reply With Quote
Old 07-12-2016, 06:30 AM   #13
Full time employment: Posting here.
 
Join Date: Feb 2012
Posts: 938
Have toyed with the idea of returning to FL and part of the equations was the income tax. Recently spent 5 weeks at a friend's home there in northeast Fl. DW and I looked at a home we really liked, 10 minute walk to the beach. We pay about $10k in NC income tax and all but 4 of that would be eaten by property tax, admittedly home was pricier. Add in $2k more in homeowners and IIRC the price of car insurance was vastly higher in FL when we left, and it was a wash. When the minimum withdrawals kick in on the IRA it might push it more, but still.

We might still do something along those lines but taxes won't be the reason.
__________________
H2ODude is offline   Reply With Quote
Old 07-12-2016, 07:46 AM   #14
Full time employment: Posting here.
 
Join Date: Dec 2015
Posts: 695
I have looked at the same option vis. a vis. NY State Income tax. my income is nowhere near enough to make it worth it unless I also wanted to live there for most of the 185 days/year I'd need to to make my residency Floridian.

My Dad lived in Ohio, and wanted to do this, as he and Mom had a home in Fla. however my Mom nixed the idea because she flat out refused to be in Florida for those hot months.

Which, BTW, to the OP, made me wonder if you could avoid Ohio residency with your wife continuing to be in Ohio enough days to continue her employment there. My guess is that you could not.
__________________
HadEnuff is online now   Reply With Quote
Old 07-12-2016, 08:15 AM   #15
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 65
First, thanks for all the replies. You've confirmed my thinking on the subject.

Second, yes, we want to live in FL some day, but my wife does not want to retire yet. We are comfortable living apart for long periods of time because I did that when I was working.

Third, if we did this, our filing status would be married filing separately for both fed and state. The numbers I quoted are for my income only, including Roth conversions which I have going on.

Fourth, I'm not sure that you have to cut all ties to your former state. I know a number of snowbirds who live at least 185 days / yr in FL, but live the hot summer months in OH. They've been doing this for years. They own a condo in FL. Theirs cars are registered in FL and they have FL drivers licenses. They probably have other FL registrations and ties. But they also still own their OH home. They are not physically in FL for all 185 days because they travel.

Sent from my SM-G900T using Early Retirement Forum mobile app
__________________
trapperjohn is offline   Reply With Quote
Old 07-12-2016, 08:29 AM   #16
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,145
We're changing our residency to Florida by the end of the year from PA. But we chose to live half the year in a beach condo we bought and DW is done with work completely in November. We'll save on income tax and the kids will save a bundle on a punishing inheritance tax. Our banks and brokerages are all online so a change of address will be easy. Car insurance may go up but changing our homestead to our FL condo will lower property taxes more there than they will be raised in PA by removing our homestead. We can keep both properties without a problem. We'll join a church in Florida but also maintain a relationship with our FL church in the summer months. Car registration, drivers license and voting changes will be after the election. We'll still have to file a yearly PA income tax for our rental property, but will turn management over to a property manager.


Enjoying life!
__________________
Dash man is offline   Reply With Quote
Old 07-12-2016, 08:36 AM   #17
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 3,473
if you are making 375K, the 15K "savings" you may recognize is chump change compared to the move and having to live in FL
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 07-12-2016, 08:45 AM   #18
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 78
Just to be pedantic: since this discussion revolves around the tax implications of various scenarios, I believe you need to understand domicile vs. residency. Most state tax booklets say that you have to pay taxes in that state when you are domiciled in the state. The two are similar, but not exactly.
__________________
clobber is offline   Reply With Quote
Old 07-12-2016, 08:56 AM   #19
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 65
Sooo, when we're talking about FL which has no state income tax, what is the difference between a domicile and a residence?

Sent from my SM-G900T using Early Retirement Forum mobile app
__________________
trapperjohn is offline   Reply With Quote
Old 07-12-2016, 08:57 AM   #20
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 3,473
Quote:
Originally Posted by trapperjohn View Post
Sooo, when we're talking about FL which has no state income tax, what is the difference between a domicile and a residence?

Sent from my SM-G900T using Early Retirement Forum mobile app
permenancy
__________________

__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
State Residency and Taxes??? Orchidflower FIRE and Money 35 08-08-2007 10:45 AM
State residency for Armed Forces personnels for in-state college tuition. Sam Other topics 9 07-30-2007 06:06 PM
Housing residency question Mwsinron FIRE and Money 5 04-30-2007 01:14 PM
California Residency Interpretation OldAgePensioner Other topics 15 06-06-2006 05:07 PM
definiton of legal residency the_tucson_kid FIRE and Money 10 10-15-2003 01:42 PM

 

 
All times are GMT -6. The time now is 05:37 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.