New York, N.Y./Red Bank, N.J. – At a time when federal tax reform has escalated the cost of living in New York, New Jersey, Connecticut and Illinois, residents continue to weigh their options – including whether to establish residency in the tax-relief-friendly state of Florida, according to the professionals at WithumSmith+Brown PC (Withum) and Withum Wealth Management. The nationally ranked advisory, tax, assurance and accounting firm recently hosted a public forum to address the wide range of existing and emerging issues related to these tactics.
“In the aftermath of federal tax reform, revenue-starved states are intensifying their scrutiny of individuals and families attempting to change their residency,” explained Barry Horowitz, CPA, MST, a partner in Withum’s State and Local Tax Services based in the New York City Office. “As a result, there is a mass migration to Florida underway. However, this is not as simple as filling out a change-of-address card – there are quite a few general guidelines for establishing a successful residency, of which most people are unaware.”
During the open-to-the-public event, Withum’s Horowitz and Ted Nappi, CPA/PFS, CSEP, team co-leader of the firm’s Private Client Services based in the Red Bank office, were joined by Alvan Bobrow, Esq., a partner in the State and Local Tax Practice of New York City-based law firm Akerman LLP. Hot-button areas of focus included the domicile vs. statutory residency vs. allocation of income debate; how a “change of residence” income tax return should be correctly prepared; planning for the state tax examination; and common mistakes in estate planning.
In addition to Florida, other income-tax-free states include Wyoming, Washington, Texas, South Dakota, Nevada and Alaska. “With the ability to work from remote locations easier than ever before, many high-net-worth individuals and families are now considering making a move to change their place of domicile,” said Nappi. “However, it is imperative to get it right the first time and be advised properly of what to do and not do in establishing new out-of-state residency.”
Established in 1974, Withum is a national top-ranking public accounting firm providing advisory, tax and audit services to businesses and individuals on a local-to-global scale. In addition to its office in New York City, Withum is headquartered in Princeton, N.J., and has a presence in major financial centers including Boston, MA; Philadelphia, PA; Washington, DC.; and Orlando, FL. Withum also is an independent member of HLB, the global advisory and accounting network.