Ask Experts Questions for FREE Help !
Ask
    taxques-ml's Avatar
    taxques-ml Posts: 1, Reputation: 1
    New Member
     
    #1

    Aug 24, 2008, 04:52 PM
    Florida vs ny residency
    My husband and I both retired early (ages 57 & 59) in January and moved to Florida on Jan. 5, 2008 (we own the home). At the end of May we came back to NY for the Summer and will stay until October (own home here also). We did not change our residency to Florida but are considering changing it to Florida when we go back (if it a good thing to do).

    Are there pro's and cons on doing this? I do know there is a resident property tax break and no state income tax in Florida but not sure if there are other benefits. Can anyone help educate us on this important decision??

    Also, if it is a good thing to change to FL residency, do we need to pay NY state tax for the full 2008 year?

    Thanks, I appreciate it!
    Diane Carol's Avatar
    Diane Carol Posts: 76, Reputation: 4
    Junior Member
     
    #2

    Aug 24, 2008, 05:11 PM
    First, about the residency for the "Homestead Act" reduction in taxes. You have to be a full 12 month resident of the State to be eligible. If you live, even part time, out of the state, then the State Homestead Act will disqualify you.
    If you rent out your Florida home and go live the 6-months in your New York home, that is enough to disqualify you.

    The Homestead Act... if it hasn't changed in the last little while is $25,000 is reduced from the assessment. You might, if you think such reductiion is of little use to you, you might just not apply and pay the taxes as per the assessed value of your Florida home and live your llive your life without the reduced taxes. If you rent out the Florida home and figure out you are money ahead after paying the full taxes, then you can think to do that.
    Either way, a thorough investigation should be done.

    Caution: Never tell a neighbour or somebody in the complex you have bought in Florida about how you live part time in N.Y. Wagging tongues have cost many a reduction.
    Its not against the law even in Fl;orida to leave the state for a reasonable time... such as going on vacation. But, if you leave for any extended time and you inform a neighbor... possibly he/she is looking after the place, make sure that person is trustworthy to not tell tales.
    If they remove your qualification... you have to spend much time and maybe money to get it back.
    You may have to prove the out-of-state-time was in no way abandoning the Act.

    With such Homestead Act reduction, you will be required to have a Florida Driver's License and Florida plates on your vehicle.
    If you are of age to send children to school, you will have to be a full resident of the State, or pay large amounts to have the kids admitted.

    If you change your resident status, you will pay New York taxes according to the time you lived in the state. The change though must be recognized under the law, not just that you have moved to Florida and are thinking of taking up full residency.
    Only when it is a done deal, will New York let you off the hook for State taxes.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #3

    Aug 25, 2008, 03:52 AM
    You will pay tax on all your 2008 income in NY.
    Read Your U.S. Tax Return: Working or Living in Two or More states
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #4

    Aug 25, 2008, 08:37 AM
    There is definitely a tax advantage to being a FL resident as opposed to NY - it can save you thousands of dol;lars each year. The key to showing that you are now a FL resident is t be able to document that you spend more than half the tear in FL, and conversely less than half in NY. It does not matter that you still own a NY home - you now consider that to be your vacation home. It would be wise for you to change your driver's license and address of record that the IRS has on you to FL, and also make sure all financial records are mailed there rather than NY. This way, assuming you don't have any NY sources of income (i.e. your income is from investments, retirement plans, and (later) social security), you won't have to pay NY income tax in any of it. For 2008 it would be ideal if you could claim that as of Jan 5 you are a FL resident. For 2008 you would file a part-year resident tax return for NY (IT-203) to cover income you earned from Jan 1 through Jan 5, and for 2009 and later no tax filing with NY at all. But you must be vigilant to be able to show that you spend more than 6 months each calendar year in FL, so be sure to plan your return to FL in October to be able to give you that 6 months minimum.
    Diane Carol's Avatar
    Diane Carol Posts: 76, Reputation: 4
    Junior Member
     
    #5

    Aug 25, 2008, 01:51 PM
    EBaines, I believe you are mistaken about Florida's Homestead Act allowing people to enjoy the benefit of such reduction in taxes on real estate and yet live outside the state in another home.
    Unless they have changed the law recently, any Florida resident must have his permanent resident status in the state... and not live outside the state for an extended time.
    Six months would suggest that Florida is not the permanent residence needed for Homestead Act qualification.

    It must be a person's permanent residence and such residence must be with all the requirements of what that means. The Florida authorities that control the qualifications for reduction of real estate taxes do not allow such reduction on a "per number of days in the state".
    Either you are, a permanent resident of the State of Florida... or you are not... and if not, are not eligible for Homestead Act reduction of taxes.

    As far as state taxes, if you can prove you earned income outside the state of New York, that state cannot lay claim to taxes earned on such income.
    The Federal Government lays claim to "worldwide" income for tax purposes... but that doesn't apply to state taxes. A person having earned income in New York in January, cannot possibly be on the hook for taxes for eleven months earned income in California.

    I know New York is near bankruptcy but to try to nail people for taxes earned outside the confines of that state is going a bit too far.
    It would like laying claim to taxes on energy produced by Ontario Hydro on income it derrived from making electricity from the water going over the Horseshoe Falls (Canadian Falls). Its all one river... the Niagara... but half of it is owned by Canada.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #6

    Aug 25, 2008, 02:01 PM
    Quote Originally Posted by Diane Carol
    EBaines, I believe you are mistaken about Florida's Homestead Act allowing people to enjoy the benefit of such reduction in taxes on real estate and yet live outside the state in another home.
    Diane - I was only addressing income tax issues - issues such as filing part-year resident return for NY, and being able to document FL residency so as to not get hit for NY income taxes.
    thevillages's Avatar
    thevillages Posts: 2, Reputation: 1
    New Member
     
    #7

    Sep 25, 2009, 11:47 AM
    Homestead Exemption Up To $50,000



    Every person who owns and resides on real property in Florida on January 1 and makes the property their permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxes.

    If one spouse holds the title, the other spouse may file for the exemption with the consent of the titleholder.

    If filing for the first time, be prepared to answer these questions:

    1. In whose name or names was the title to the dwelling recorded as of January 1?
    2. What is the street address of the property?
    3. How long have you been a legal resident of the State of Florida? (A Declaration of Domicile or Voter's Registration will be proof of date before January 1.)
    4. Do you have a Florida license plate on your car and a Florida driver's license?
    5. Were you living in the dwelling on January 1?
    thevillages's Avatar
    thevillages Posts: 2, Reputation: 1
    New Member
     
    #8

    Sep 25, 2009, 11:56 AM
    Should have added that the previous post on $50000 exemption was copied from Fl Dept of Rev - Property Tax. (I didn't make it up)

    You'll note it states you must be a permanent residence of Florida but I don't believe that means you captive to Fl and can't also live someplace else also. TO become a resident of Fl you can't live in NY more then 183 days a year along with the other items mentioned (car registration, driver license, no exemptions in the state you have another house in, safety dept box, banking etc)
    riverratgaterta's Avatar
    riverratgaterta Posts: 1, Reputation: 1
    New Member
     
    #9

    Jan 30, 2013, 11:46 AM
    If I sold my business in Alabama in 2102, and will receive a payment for it the next three years, and become a resident of Florida in January 2013, will I have to pay Alabama state tax on the future money I receive.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #10

    Jan 30, 2013, 11:52 AM
    Quote Originally Posted by riverratgaterta View Post
    If I sold my business in alabama in 2102, and will recieve a payment for it the next three years, and become a resident of Florida in january 2013, will I have to pay alabama state tax on the future money I recieve.
    If you sold property or other physical assets that are located in AL then yes, you will file a non-resident AL income tax return to report and pay taxes on this Alabama-based income.
    MLSNC's Avatar
    MLSNC Posts: 158, Reputation: 17
    Junior Member
     
    #11

    Jan 30, 2013, 01:03 PM
    I agree with ebaines that the gain to be reported would still be Alabama income. However, if you are earning interest on the debt, I do not believe that would not be considered Alabama income.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #12

    Jan 30, 2013, 05:19 PM
    I agree with BOTH ebaines and MLSNC.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Residency and Taxes [ 1 Answers ]

I currently live in Ohio but am moving to New Mexico. I have a contract to stay 18 months. Do I have to file taxes in both states, partial year taxes or can I just file the entire year in Ohio?:confused:

L1 Tax Residency 2007 [ 1 Answers ]

Hi. H&R Block have prepared our tax return for 2007 but believe we should file as married filing separatly as we are non-residents because we are on an L Visa - My husband is on an L1 and I am on L2. We entered the country on 18th Sept 2006 and left on 4th Jan 2007. We both worked for the full...

F1-OPT and residency status [ 1 Answers ]

Hi: I have been in the US since 2001 August. For the year 2006, I filed the 1040 and filed jointly with my husband (who has been in the US since 2000). Both of us were on F1. For the year 2007, I was on F1-OPT and my husband was on F-1. My SSN and medicare taxes were withheld for 2007....

Residency Visa [ 1 Answers ]

Hi, I am a UK citizen and my husband is Turkish. We recently moved to the UK and my husband would like to apply for residency here. Does anyone know how long this usually takes, and how long we need to have been living in the UK together? Thanks juliko

Florida/nc residency [ 3 Answers ]

My spouse & I were both NC residents for tax purposes through 2000. In early 2001 I moved to Florida and became a resident. My spouse continued to be a NC resident. In 2001 we filed a joint federal return plus a NC return showing my spouse as a full time resident while I filed as a part time...


View more questions Search