Watch out for hidden taxes when retiring to a new state

Personal Finance

All those who move to a new state will want to make sure they firmly establish residency so that they don’t get hit with taxes from the state they leave behind.

For individuals who move to Florida, there is a form to file with the state to make it your domicile, according to Chris Raulston, wealth strategist at Raymond James. But for most situations, the distinction is not as clear.

“There’s no form you file, box you check,” Raulston said. “It comes down to facts and circumstances.”

To establish residency in the new state, individuals should avoid spending more than half the year ― 183 days ― in their former state, according to Raulston.

Ideally, individuals should purchase a home in their new state and sell a former home. Those who want to hold on to the property in their old state may consider transferring it to other family members, a trust or a limited liability company.

“They don’t necessarily have to sell it,” Raulston said. “But they do have to relinquish ownership.”

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