Millions of people each year move from one state to another. Reasons for relocating range from a new job, to retiring, or simply moving to enjoy a better climate. The financial and personal impact of buying and/or selling a home can be enormous. One aspect you should fully understand before making a big move is the tax implications.
Real estate agents are not financial advisors, but they do know a thing or two about what to do before relocating. At the top of the list is to legally change your state of residence and determine how that affects taxes on income, property, and your estate.
Once you’re a legal resident of your new home state, you can apply for incentives like homestead exemptions for your primary residence if you are 65 or older. Also make sure you’ve updated the new address on your credit report. Investigate how the enforcement of certain legal documents like wills and powers of attorney might change because of the change in residence.
Rules are different from state to state, and many experts suggest trying to make your move as early in the year as possible in order to minimize the impact. Tax returns can be confusing when you’re claiming residency in two different states during the year you move. Trust a real estate professional to help you with selling, buying and moving, and seek advice from a tax consultant about the financial implications.