Crain’s firm maintains a domicile checklist for relocating clients that includes gathering information such as credit card and cell phone statements, tollway pass charges and flight records to substantiate physical presence; moving heirlooms, art and family photo albums to the new state; and updating estate planning documents.
“Changing domiciles or residency can be a red flag for the IRS,” warned Barry Gould, partner at the EisnerAmper Advisory Group in Miami. “We work through an extensive, custom plan with our clients to ensure when they can prove to be a bona fide Florida resident.” Strategies for saving taxes in a move include gifting, Roth conversions, trust and estate planning, an entity conversion and SALT-deduction workarounds, he said.
Many states have also implemented SALT tax workarounds for pass-through entities, allowing a federal deduction for the partnership for the state tax paid for the partners, Rossman added.
Even if clients save on taxes, relocations are still big investments in time and trouble. “Once you’re gone, stay gone, or at the very least limit any instance of travel back into the state,” Burgos said.