Florida Among States That Become Better for Retirees Under GOP Tax Plan
One of the primary aspects of the recent tax reform bill is that it drastically limits the deductions taxpayers can take for local and state taxes. Therefore, people who have not yet retired are more likely to consider if they will relocate to a more tax-friendly state in the future.
Florida is one of those especially tax-friendly states, as there is no individual state income tax. It is one of seven states without a state income tax — the others being Alaska, Nevada, South Dakota, Texas, Washington and Wyoming. Tennessee, while it does not have personal income tax, it does have taxes on capital gains and interest, at least for the time being.
The new tax plan doubles the estate tax exemption for individuals from $5.49 million to about $11 million. However, there are 14 states (along with the District of Columbia) that have estate taxes of their own, with another six that have inheritance taxes.
Florida is not one of those states, and so wealthy individuals can come into the state and avoid paying state income taxes, while also not having to worry about being subject to an estate tax unless their estate is valued at more than $11 million.
Thanks to its warm weather and tax-friendly nature, Florida has long been a hotspot for retirees. The new tax bill could increase the number of people coming in from other states, especially those with heavier tax burdens.
If you would like more information on how the new tax plan may affect your estate planning efforts, work with a dedicated Tampa attorney at BaumannKangas Estate Law.