Florida has warm weather and no state income or estate tax. It is not surprising that many people choose to relocate to Florida when they retire. You may be surprised to learn that merely spending more than six months in Florida is not enough to change your residency from Massachusetts for tax purposes.

There can be risks to changing your residency as Massachusetts is always reluctant to lose any taxpayers. In order to minimize the risks, you must demonstrate that Florida is the center of your business and personal life. Your Boston Financial Management team can work with your outside advisors to review the steps that you should take.

Under Massachusetts law, a “resident” is someone who is a) domiciled in the Commonwealth or b) someone who maintains a permanent residence in the Commonwealth and spends more than 183 days of the taxable year in the Commonwealth. If you continue to maintain a home in Massachusetts, then the Department of Revenue will take a variety of factors into consideration to determine whether you have severed ties with the state. Certain factors provide evidence that you are changing your residency to Florida, such as:

  • Articulate goals, needs and risk tolerance
  • Organize and review important financial and legal records
  • Develop personal statements of net worth with an understanding of each component
  • Evaluate existing plans and products
  • Seek fresh ideas from existing or new specialized professional advisors, including tax, legal, insurance and investment professionals
  • Consider asset allocation options
  • Discuss wealth creation, management, preservation and transfer alternatives
  • Analyze and project cash flows
  • Transform what we learn into a comprehensive financial plan
  • Coordinate the work of specialized advisors in implementing, monitoring and updating the plan.

There can be risks to changing your residency as Massachusetts is always reluctant to lose any taxpayers. In order to minimize the risks, you must demonstrate that Florida is the center of your business and personal life. Your Boston Financial Management team can work with your outside advisors to review the steps that you should take.

Please Note: Examples shown are for illustrative purposes only and do not represent the performance of any account, portfolio, composite of accounts or specific recommendation of Boston Financial Management. Your actual performance will vary based on your particular circumstances and should be adjusted to reflect management fees and trading costs. Investment in securities involves risks, including the risk of loss of principal. Past performance is not a guarantee of future returns. IRS Circular 230 Disclosure: Pursuant to IRS Regulations, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax related penalties or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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