Tax Implications of Relocating: If You Are New To Florida, Know What To Expect

Florida’s warm climate, vibrant culture, and reasonable cost of living drive thousands of people to move to the Sunshine State each year. Relocating also offers tax advantages and incentives for retirees and business owners.

However, if you relocated over the past year, make sure you understand state tax laws and potential implications. Florida tax attorney Ronald Cutler is a certified public accountant and a former FBI special agent. He breaks down the essential tax considerations for those new to the state and the steps needed to ensure a smooth transition.

Key Tax Issues for New Florida Residents

According to the Census Bureau, nearly 500,000 people moved to Florida in 2024, one of the most significant gains in the country. Potential tax benefits encourage those from other states to relocate and can help simplify your tax situation.

As a new tax season approaches, our Florida tax attorney wants you to be aware of basic tax issues that could impact your state and federal returns:

• Florida state tax: Under the Florida Constitution, residents do not pay state income tax, which provides significant financial advantages for people from New York and other high-tax areas.
• Florida property taxes: Florida offers a homestead exemption of up to $50,000 for primary residences and caps annual property tax increases at three percent, lower than the national average.
• Florida sales tax: The state tax rate is at six percent. While reasonable compared to other states, high county and other local taxes may apply.
• Florida estate/inheritance taxes: Florida does not impose state-level estate or inheritance taxes, which makes it particularly attractive for retirees.

Navigating Florida’s Tax System If You Recently Relocated

Relocating to Florida can offer tax benefits, but to take advantage of them requires compliance with state and federal laws. With tax season approaching, take these steps:

• Establish legal residency in Florida: Get a state-issued driver’s license, register to vote, and file a Declaration of Domicile form in your country. You must stay in Florida for at least six months and one day per year to maintain residency.
• Understand Florida sales tax: If you are a business owner, review your tax withholding and estimated payments to align with Florida’s lack of state income tax. As a consumer, be wary of county surtaxes when making significant purchases and track major expenses for potential tax reporting.
• Claim property tax exemptions: Confirm your property qualifies by consulting your county’s property appraiser office and applying for the homestead exemption by March 1.
• Consider federal tax implications: Work with a tax professional to understand how Florida’s policies could impact federal tax obligations.

Get Trusted Guidance From Our Experienced Florida Tax Attorney

If you are one of the many who recently relocated to Florida, understanding how state tax laws work can help in reaping tax benefits. Ronald Cutler, P.A. has over 50 years of experience helping clients in our area. As a Certified Public Accountant and a former FBI Special Agent, he helps ensure compliance and addresses any issues that arise. Contact our office today to request a consultation.

Sources:

leg.state.fl.us/statutes/index.cfm?submenu=3

census.gov/newsroom/press-releases/2024/population-estimates-international-migration.html