What are the snowbirding rules to avoid paying Minnesota state income taxes? (health insurance, house)

[David A Stone]

Originally Posted by OneTimeSEALover

Makes me smile to see people asking legal advice on a discussion forum. Luckily, most responders just say "visit a professional". You can get EXACTLY what you need for tax-dodging from professionals. I doubt anyone brings a truly original question, but they need to keep up on legal minutiae to continue in their profession, so they probably won't miss what self-appointed experts say online.

Well, if any poster thinks you can become a Florida resident to avoid MN income tax yet receive a homestead credit on a Minnesota house..........I have bridges to sell that poster!

[davephan]

Originally Posted by OneTimeSEALover

Makes me smile to see people asking legal advice on a discussion forum. Luckily, most responders just say "visit a professional". You can get EXACTLY what you need for tax-dodging from professionals. I doubt anyone brings a truly original question, but they need to keep up on legal minutiae to continue in their profession, so they probably won't miss what self-appointed experts say online.

I was trying to seek advice from people who live part-time in Minnesota and an income tax free state. Will have a high income stream even in retirement because we lived our lives in a responsible manner, educationing ourselves to acquire high income careers, maximizing the education investment, and living well below our means. That's how people that did not inherit their wealth become millionaires.

We have the right to minimize our taxes, especially when a lot of the money is wasted on freeloaders or people that are sympathetic to freeloaders. There are some people that deserve assistance, but there are a lot of people that are simply 'milking' the system.

Some of the people that responded offered good advice, which was helpful.

[nbtmn]

My in-laws are embarking on the same plan - half the year in FL and half the year in MN, with the goal of acquiring FL residency so they can avoid state income tax (owning here and renting there). I would take this with a grain of salt and confirm it on your own with a tax expert, as I have only heard info from them secondhand, but they were told that all they have to do is spend 183 days out of the state to claim FL residency. I also believe that if you take any trips back to MN during snowbird season (Christmas, etc), that counts towards your days in MN. I'm sure, as others mention, this means they will lose homestead exemption on their house, but I would assume the income tax savings more than makes up for it.

[davephan]

Originally Posted by nbtmn

My in-laws are embarking on the same plan - half the year in FL and half the year in MN, with the goal of acquiring FL residency so they can avoid state income tax (owning here and renting there). I would take this with a grain of salt and confirm it on your own with a tax expert, as I have only heard info from them secondhand, but they were told that all they have to do is spend 183 days out of the state to claim FL residency. I also believe that if you take any trips back to MN during snowbird season (Christmas, etc), that counts towards your days in MN. I'm sure, as others mention, this means they will lose homestead exemption on their house, but I would assume the income tax savings more than makes up for it.

We will have to consult a CPA or tax professional when we get closer to retirement. I was hoping to get some questions answered to be better prepared for a meeting with a professional, to know what questions to ask, and to know how snowbirding effects other people who are already snowbirding.

We don't qualify for the homesteading property tax reduction because we make too much money, and don't qualify for homesteading. So, homestead property tax reduction is a non-factor for us.

There are higher costs in Florida than Minnesota for both auto and home insurance. But the savings from no state income tax in Florida more than makes up for higher costs for some things. This is especially true when withdrawing money from the pre-tax retirement accounts.

[Glenfield]

Originally Posted by davephan

We will have to consult a CPA or tax professional when we get closer to retirement. I was hoping to get some questions answered to be better prepared for a meeting with a professional, to know what questions to ask, and to know how snowbirding effects other people who are already snowbirding.

We don't qualify for the homesteading property tax reduction because we make too much money, and don't qualify for homesteading. So, homestead property tax reduction is a non-factor for us.

There are higher costs in Florida than Minnesota for both auto and home insurance. But the savings from no state income tax in Florida more than makes up for higher costs for some things. This is especially true when withdrawing money from the pre-tax retirement accounts.

You might want to call your county treasurer's office and see if your property has been homesteaded. A homestead classification is applied to an owner occupied property, isn't income dependent, and may entitle you to pay less in property tax. If you own your home and it's your primary residence, it qualifies for a homestead exemption. The folks at the county treasurer's office would be happy to talk to you about this.
http://www.revenue.state.mn.us/prope...ctsheet_10.pdf

[nbtmn]

Originally Posted by Glenfield

You might want to call your county treasurer's office and see if your property has been homesteaded. A homestead classification is applied to an owner occupied property, isn't income dependent, and may entitle you to pay less in property tax. If you own your home and it's your primary residence, it qualifies for a homestead exemption. The folks at the county treasurer's office would be happy to talk to you about this.
http://www.revenue.state.mn.us/prope...ctsheet_10.pdf

We almost moved last year, and I learned a little more about the homestead exemption - at least in Washington County. The amount you can deduct is based on the assessed value of your house, not your income. There is a certain point (I think in the $400k range) where the deduction completely phases out, and there is no difference in property tax owed if the house is homesteaded or not. Maybe OP's house is assessed too high to qualify for the deduction?

[davephan]

Originally Posted by Glenfield

You might want to call your county treasurer's office and see if your property has been homesteaded. A homestead classification is applied to an owner occupied property, isn't income dependent, and may entitle you to pay less in property tax. If you own your home and it's your primary residence, it qualifies for a homestead exemption. The folks at the county treasurer's office would be happy to talk to you about this.
http://www.revenue.state.mn.us/prope...ctsheet_10.pdf

Thanks for the homestead information. I will check with Washington County about the details.

Originally Posted by nbtmn

We almost moved last year, and I learned a little more about the homestead exemption - at least in Washington County. The amount you can deduct is based on the assessed value of your house, not your income. There is a certain point (I think in the $400k range) where the deduction completely phases out, and there is no difference in property tax owed if the house is homesteaded or not. Maybe OP's house is assessed too high to qualify for the deduction?

Our assessed value is over $400K. We live debt free and live well below out means, saving a lot of money for retirement, so we can have a comfortable retirement. Earning a higher income is not an accident. We educated ourselves in a high return with our education investment. If you're going to college, that investment in time, money, and effort should not be wasted, resulting in no job, or a low wage job, which can be accomplished without a college degree. We don't want to pay more taxes than we need to pay, especially since much of the money collected in taxes is wasted, spent in a irresponsible manner. Some people on the 'system' deserve assistance, but there is a huge number that are on the 'system' that are freeloaders, simply too lazy to work.

[Thedosius]

Originally Posted by davephan

We don't want to pay more taxes than we need to pay, especially since much of the money collected in taxes is wasted, spent in a irresponsible manner. Some people on the 'system' deserve assistance, but there is a huge number that are on the 'system' that are freeloaders, simply too lazy to work.

Sounds like a justification for being selfish and not giving back when you have the ability to do so.

[Gerania]

Originally Posted by davephan

I was trying to seek advice from people who live part-time in Minnesota and an income tax free state. Will have a high income stream even in retirement because we lived our lives in a responsible manner, educationing ourselves to acquire high income careers, maximizing the education investment, and living well below our means. That's how people that did not inherit their wealth become millionaires.

We have the right to minimize our taxes, especially when a lot of the money is wasted on freeloaders or people that are sympathetic to freeloaders. There are some people that deserve assistance, but there are a lot of people that are simply 'milking' the system.

Some of the people that responded offered good advice, which was helpful.

You can and should reduce your tax burden. It provides more money for charitable donations.

You were lucky. Yes, lucky. You didn't have to spend your retirement money trying to save someone's life.

Is there a lifetime max to your medical insurance policy? I met that guy when I was in my 20s. His wife was dying of brain cancer. I was a BC/BS customer service representative, personal interview. We cried together. He was going to lose just about everything. He was in his late 40s.

[davephan]

Originally Posted by Gerania

You can and should reduce your tax burden. It provides more money for charitable donations.

You were lucky. Yes, lucky. You didn't have to spend your retirement money trying to save someone's life.

Is there a lifetime max to your medical insurance policy? I met that guy when I was in my 20s. His wife was dying of brain cancer. I was a BC/BS customer service representative, personal interview. We cried together. He was going to lose just about everything. He was in his late 40s.

That's a sad situation, losing everything, and have your health go down the drain. My philosophy is there has to be quality of life. I believe that assisted suicide is the way out of that situation, instead of being in terminal declining health with constant pain.