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Phone: 973-455-1894 | 51 Dumont Place, Morristown, NJ 07960 | Get directions!

Kiely Capital Management offers financial planning and investment advice. Serving Central and Northern New Jersey, Yvonne and Bernard (Bernie) Kiely provide over 25 years of experience offering discretionary asset management, retirement planning and income tax preparation. KCM is registered with the State of New Jersey as a Registered Investment Advisor.

 

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I’m moving to Florida. How will N.J. look at our taxes?

 

Q. My wife and I are becoming Florida residents this month - October. For the purposes of our 2019 New Jersey income tax return, can we claim only 10 months of our income in New Jersey rather than 12 months?

— Getting out

 

A. Congrats on the move.

 

You’re going to have to do some math.

 

When you move from one state to another, you are required to prorate your income and tax deductions between the states, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.


He said he usually suggests his clients break their residency into months or months and fractions of months. You will have 10 months in New Jersey and two months in Florida.

 

Kiely said individual taxpayers are cash receipts and cash disbursement taxpayers.

 

“This means you record income when you receive it, or when it is available,” he said. “And you record expenses when you pay them.”

 

For example, interest on a savings account is usually credited monthly. So you would record 87.5 percent of your savings account interest on your New Jersey income tax return.

 

Mutual fund distributions are another matter, Kiely said.

 

A mutual fund that owns stocks pays out dividends that it receives from the stocks it holds and it pays out capital gains distributions. A capital gain is a gain a mutual fund recognizes when it sells shares of stock for a gain the same as when an individual sells a share of stock, he said.


“Mutual funds pay dividends out to shareholders monthly, quarterly or annually,” he said. “All mutual funds pay out capital gains distributions annually, usually in mid-December. So when you receive your 1099-Div from a mutual fund, none of the capital gains would be reported on your New Jersey income tax return.”

 

You should consider a few more items, Kiely said.

 

If you are retired and have not yet taken your Required Minimum Distribution from your IRA, wait until you move to Florida to take it. Also, he said, if you have shares of stock you want to sell for a gain, wait until you move to Florida to sell it.

 

“Florida has no state income tax,” he said. “No sense paying taxes to New Jersey if you don’t have to.”

 

Email your questions to Ask@NJMoneyHelp.com.


Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.

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