States go to great lengths to claim a person as a resident for tax purposes, but there is a difference between your residence and your domicile, which may be in a different location. This article discusses the steps that you can take if you are looking to establish your domicile in Florida.
While the term “residence” refers to the location where you physically live at the moment, “domicile” refers to the status of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave permanently.
Below are steps that you can take if you are looking to establish your domicile in Florida. However, no one step will automatically guarantee you success in changing your domicile for tax purposes. In the final analysis, your domicile is a subjective matter, based on the documentation and analysis by the state.
- Purchase a home or condominium and relocate your most near and dear possessions to your new home. If you choose to rent instead, execute a lease for as long a term as possible. Note: More weight will be given to a title purchase of a home.
- File a Declaration of Domicile with the Clerk of Court in the Florida County in which you reside. Florida is among those states that provide for filing such a declaration.
- Claim any homestead exemptions that may be available.
- Obtain a Florida driver license and cancel your old driver license.
- Register your car in Florida and cancel your old vehicle registration.
- Complete a Florida Voter Registration Application and vote in Florida during the next election.
- Update your wills or trusts and have them executed in Florida.
- Use Florida services and professionals where possible:
- Insurance agents
- Certified Public Accountants
- Healthcare providers
- Investment advisors
- Spend more time in Florida than you spend in your former state.
Some other steps that may be taken include the following:
- Inform credit card companies, frequent flyer affiliates, and similar organizations of your Florida address.
- Change magazine subscriptions to your Florida address.
- Open charge accounts in Florida with local vendors.
- Send Change of Address forms to everyone you can think of, including the Social Security Administration. Notify your post office to forward all mail to your Florida address.
- Arrange to have all federal income tax forms, such as Form W-2 and 1099, mailed to your Florida address.
- File a Change of Address form (Form 8822) with the Internal Revenue Service. Show your Florida address on your next federal and state income tax return (Form 1040) and on all future federal tax returns. File a federal return with the proper IRS office indicated for your Florida address.
- Open a safety deposit box in Florida and transfer all valuables and pertinent papers. Close your old safety deposit box.
- Maintain important papers, such as birth certificates, Social Security cards, marriage and divorce records, and copies of tax returns at your Florida location.
- Apply for a new passport using your Florida address, even if your current passport has not expired.
- If you continue to maintain a home or apartment in your former state, arrange for the utility bills to be sent to your Florida address.
- Join organizations such as clubs and religious groups in your domicile state.
- Become active with your local charities.
- Arrange for family gatherings in Florida, not your old state.
- Use Florida as your home base. when you travel depart from Florida and return back to Florida.
- Take years to abandon your old Domicile by removing your name from your voter registration, turning in your driver's license, pay income tax if applicable as a nonresident, close old accounts, and change all memberships and affications to non-resident.
You must be aware that your former state may still try to claim you as a resident, even if you have done all of the items suggested above. Recent cases in New York, Connecticut and other northern states have shown that states go to great lengths to claim a person as a resident for tax purposes. Primary guidelines by these states may include housing, business, time, near and dear possessions and a family factor. We strongly recommend that you obtain advice from a CPA and/or attorney to assist you in doing everything possible to avoid remaining a resident for income, estate or inheritance tax purposes.
We would be happy to assist you with any of your questions. Please contact a Kerkering Barberio professional tax advisor at 941-365-4617.