After 2017’s end-of-December decision regarding whether to prepay taxes is set, the limitation of deductibility of state and local taxes seemed to drop off the radar. However, it seems to be coming back into the limelight as the first milestone of its effect rears its head this spring. For the wealthy tri-state area set, there’s more buzz than ever about fleeing south to Florida, the land of mild winters and, more importantly, zero state personal income tax.
We have known for years that the tax collectors in states like New York make it really hard to leave. Those who hope to maintain a home in a high tax state are realizing that, after they hear about the scrupulous records that they would have to keep showing they’ve really uprooted their lives and severed ties with their former states. Their other realization is that it’s not as easy as just spending a few more days a month in a Florida vacation home, it’s easier to just stay put!
New York’s Department of Taxation and Finance will go to great lengths to keep wealthy residents on their tax lists. The states’ methods can be aggressive: issuing subpoenas to pour through credit card statements, bank transactions or phone records to track a taxpayer’s location; and even sending auditors to interview the building doormen.
Before you take this plunge, be sure that you understand how you have to change your life circumstances to qualify as a Florida resident. What’s involved is a truly huge life change and we are observing that less than 10 percent of clients who express an interest in moving are actually going through with it. As we have always suggested, except for the ultra-rich, it’s rare to find a situation where it’s worth uprooting just for tax reasons. We stress family considerations and community ties over a few dollars.
For those of us who choose to stay, more than 10 percent of New Jersey residents will see a tax hike this year. In New York, it’s 8.3 percent who will see higher levies. As the politicians expected, life comes first and many of us will just absorb these additional costs to maintain the lives we have chosen. But please be prepared for what might seem to be a different tax situation this April than you have been used to over the past few years and contact your tax professional before deciding to move to a lower tax state.
Whether you are a business, individual, or non-profit – we will outline specific steps you can take to minimize taxes, maximize loan eligibility, or enhance the value of your property. With one call or email we will provide you with a professional, complimentary financial Statement evaluation – no obligation. Just visit Czarbeer.com/tax-offer or contact us at firstname.lastname@example.org, or call (212) 397-2970 and we will be happy to help you and answer your questions.