When the southern climate warms up, it's time for snowbirds to migrate north, same happens for some people. Several people do a lot to stay in the same location for precisely six months and a day. They find that being in a state for more than six months makes them domiciled in that state. In some scenario, this may not be true. It all depends on the satisfaction of the specific criteria.
Domicile is a situation in which a person has a permanent and fixed home, which is their residence and their establishment. This is the homestead where they intend to return to if you retire. A person can only have one domicile at a time, regardless of the number of residences or homes they own. Once a person acquires an domicile, he/she keeps it until he/she establishes another.
A change of domicile requires:
If a person moves to a new location but only wants to stay for a limited period (no matter how long), their domicile will not change.
Your state of domicile determines
Since the domicile depends on the place of return, it is a subjective concept. However, many real actions can indicate their intention.
Below is a list of activities highlighting your intention to change your domicile? You do not have to do everything on the list. None of these things, except the requirement of physical presence at the new domicile, are absolute requirements. However, you must do enough, especially the most important ones, to convince the tax authorities that you have changed your home.
Buy or rent a property in the new state of residence. You must offer it as a permanent residence and not as a vacation spot. Keep your family's furniture, and souvenirs in a new state. Do not move objects with high sentimental value, such as family photo albums, because the previous state indicates a lack of intention to change domicilees.
You are to stay more than 183 days a year in the new state. This is an essential requirement. In some states, it is a strict tax rule. For example, if you have a residence in Chicago and spend more than 183 days a year, Chicago considers you a tax resident, regardless of your intentions.
Get a driver’s license in the new state and register your cars there too. You must also register to enable you to vote in the new state. Some of these states will have a process to apply for a home.
Go to the doctors, dentists, lawyers, and other professionals of the new state and transfer your documents from the previous state to the professionals of the new state. Move your bills. Remember that phone bills, bills, and credit cards can provide proof of where you live.
Join organizations such as religious groups, clubs, and actively participate in local charities in the new state. If possible, arrange family reunions in the new state and not in the previous state. Subscribe to local tabloids in the new state and unsubscribe of the former state.
Submit the federal declaration to the appropriate IRS service center and indicate the new status as an domicile. Also, an domicile declaration may be required if the new law includes this procedure. Modify legal documents such as wills, estate plans, and trusts to reflect the place of residence in the new state. Update the domicile of your passport in the new state of residence.
Move your bank accounts and chests to the new domicile.
Send change of domicile information to family, friends, business partners, professional organizations, credit card companies, brokers, and insurance companies.
Other indicators include the use of the new state as the basis for operations. When you travel, you leave and return to the new state. Also, keep a calendar so that you can see each year when you are in the new state.
Not only must you adopt a new domicile, but you must also leave your old domicile. In your former state of residence:
If you want to be a Pennsylvania to get rid of Texas income tax, do not register your car in Texas to benefit from lower insurance rates. Use your common sense. Does your neighbor who lives in Pennsylvania have a vehicle registered in Texas? Of course not. Do you belong to a church or synagogue in Texas? No. Imagine that you imagine that for a tax auditor.
NOTE: Tax laws change periodically, and it is advisable to consult a tax professional for the most up-to-date tips. The info in this article is not intended to override the duties of tax advisors and does not replace tax advice.
John Pournaras Agency