Florida Checklist: Everything You Need For a Successful Tax Day 

This year, Tax Day falls on April 18th, giving taxpayers an additional three days to prepare their returns. As we near the tax filing deadline, retirees in Florida may be wondering how to navigate the complexities of their returns. This Tax Day, make sure you’re prepared with APO Financial.

If you’re a retiree in Florida, you have probably already experienced many of the benefits of living in the Sunshine State. While Florida is known for its lack of state income tax, there are still many factors to consider when it comes to filing taxes, such as retirement account withdrawals, property taxes, and federal tax laws. 

To ensure a successful tax day, it’s important to be prepared and informed. From gathering necessary documents to consulting with a financial advisor, we’ll cover all the essentials to help you make the most of your retirement years.

Here is a checklist of everything you need to ensure a successful tax day as a retiree in Florida.

Document You May Need

The first step to ensure your taxes are done correctly is to make sure you have all the necessary tax documents. Your tax return checklist can be split into three categories; Personal, Dependent(s) and Income.

Personal

• Your Social Security number or tax ID number
• Your spouse’s full name and Social Security number or tax ID number
• Your unexpired government issued ID
• Your spouse’s unexpired government issued ID

Dependent(s)

• Dates of birth and Social Security numbers or other tax ID numbers
• Childcare records (including the provider’s tax ID number) if applicable
• Form 8332 when the child’s custodial parent is releasing their right to claim a child to the noncustodial parent (if applicable)

Income

• Employed
  • Forms W-2
• Unemployed
  • Unemployment (1099-G)
• Self-Employed
  • Forms 1099-NEC and 1099-K
  • Income records to verify amounts not reported on 1099s
  • Records of all expenses – check registers or credit card statements, and receipts
  • Business-use asset information (cost, date placed in service, etc.) for depreciation
  • Home office information, if applicable
  • Record of estimated tax payments made (Form 1040ES)
• Rental Income
  • Records of income and expenses
  • Rental asset information (cost, date placed in service, etc.) for depreciation
  • Record of estimated tax payments made (Form 1040ES)
• Retirement Income
  • Pension/IRA/annuity income (1099-R)
  • Traditional IRA basis (prior-year Forms 8606 showing amounts already taxed)
  • Social Security/RRB income (SSA-1099, RRB-1099)
• Savings & Investments or Dividends
  • Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
  • Income from sales of stock or other property (1099-B, 1099-S)
  • Dates of acquisition and records of your cost or other basis in property you sold (if basis is not reported on 1099-B)
  • Expenses related to your investments
  • Record of estimated tax payments made (Form 1040ES)
  • 1099-B and/or 1099-DIV from cryptocurrencies, NFTs and all other similar type income or loss
  • Cost of all cryptocurrencies, NFTs and other similar type of income sales

Other forms you could need include other sources of income/losses, charitable donations, medical expenses and health insurance.

It’s essential to keep in mind that these forms may appear differently for separate individuals. That’s why consulting with a financial advisor is crucial to ensure the accuracy and completeness of your tax return. Lastly, don’t forget to keep a record of potential deductions like charitable donations, medical expenses, or any other eligible expenses.

Need More Time?

If you can’t file by the due date of your return, you can request an automatic 6-month extension of time to file. Please be aware that:

• An extension of time to file is not an extension of time to pay.
• You must file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return by the original due date of your return.
• You should pay any owed taxes by your original due date to avoid possible penalties.

Haven’t Filed Your Tax Return Lately?

If you haven’t filed your federal income tax return for this year or for prior years, you should file your return as soon as possible. See what to do if you haven’t filed your tax return.

Review Upcoming Deadlines Carefully

With legislation changing constantly, make sure you don’t get caught off guard by moving deadlines. To help make sure you don’t miss a deadline, the IRS provides an informative online Tax Calendar. From there, you can view due dates and actions for each month. You can see all events or filter them by monthly depositor, semiweekly depositor, excise, or general event types.

You can also view the Online Tax Calendar on your mobile device.

Future dates for 2023 you should be aware of includes:

Review Florida Tax Laws

One of the major benefits of being a retiree in Florida is the absence of state income tax. This means that retirees can save a significant amount of money compared to other states that impose a state income tax. Nonetheless, it is crucial to consider other taxes, like property and sales taxes.

Reviewing Florida’s tax regulations is essential in order to stay up-to-date and maximize all potential deductions and credits. For instance, since January 1, 2023, Florida imposed a state sales tax rate of 6%, placing it 17th in the nation, and a property tax rate of 0.91%, ranking it 26th nationally.

Fortunately, APO Financial can help you review your tax situation and create a personalized plan to maximize your retirement income and minimize your tax burden.

Further Tips

For retirees who have a retirement account, such as an IRA or 401(k), it’s crucial to prepare for withdrawals and the potential tax implications. Depending on your age and the type of retirement account, you may be required to take minimum distributions, which can affect your tax liability. The timing and amount of withdrawals can also impact your taxable income and social security benefits.

Most retirees must begin taking withdrawals from their retirement plans when they reach age 72. Here is an outline of when you must begin taking your first RMD:

• IRAs (including SEPs and SIMPLE IRAs)
  • April 1 of the year following the calendar year in which you reach age 72 (73 if you reach age 72 after Dec. 31, 2022).
• 401(k), profit-sharing, 403(b), or other defined contribution plan
  Generally, April 1 following the later of the calendar year in which you:
  • reach age 72 (73 if you reach age 72 after Dec. 31, 2022), or
  • retire (if your plan allows this).

Regularly reviewing your retirement account strategy is vital to ensure that you are maximizing all accessible advantages and minimizing your tax burden. Additionally, consulting with a financial advisor can provide personalized guidance for your financial situation.

Final Tip: If you’re not sure of how much you should pay in estimated taxes this year and you don’t want to pay the wrong amount by accident, you can choose to pay 90% of your estimated current year tax bill or 100% (or 110% depending on AGI) of your prior year tax bill. This generally avoids needing to pay an underpayment penalty.

Consult With a Financial Advisor

Many individuals assume that their tax burden will decrease in retirement due to the absence of a regular salary from employment. However, this is not always the reality.

The mandated minimum distributions from retirement accounts may result in higher income tax bracket calculations, and Social Security benefits may also be subject to income taxation. For these reasons, tax planning with an experienced financial advisor is an integral component of a comprehensive retirement plan.

Financial advisors who offer tax planning can help clients optimize a tax strategy, which includes reducing tax liability and making the most of available tax deductions.

At APO, our focus is on providing a thorough analysis of all relevant accounts to determine viable strategies for reducing taxation, ensuring that our clients retain a maximum portion of their funds.

Additionally, our advisors can support you with the following services:

• Assessing different income sources, such as Social Security benefits, annuities, and pensions.
• Building an investment portfolio to establish a sustainable and tax-effective retirement income approach.
• Crafting an estate plan.
• Planning for long-term care.

By working closely with our financial advisors, you can gain a clearer understanding of your financial landscape and help you reach your full retirement stride.

Last Thoughts

Preparing for Tax Day in Florida can be a daunting task, but it doesn’t have to be.

Whether you choose to file your taxes independently or work with a tax professional, having all your necessary documents and collaborating with a financial advisor can help you avoid any last-minute surprises. 

At APO Financial, we are committed to providing expert financial advice and support to retirees in Florida. With decades of combined experience and offices located in Palm Beach Gardens, we are well-positioned to meet your needs. 

Schedule a complimentary consultation here and start planning for a financially secure retirement.

© 2023 APO Financial. All rights reserved.

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Information relating to annuities is intended for educational purposes only and should not be construed as comprehensive or all-inclusive. Therefore, it should not be regarded as a complete analysis of the subjects discussed and should not be used to make an investment decision.

Annuities can be an important part of an overall portfolio but may not be appropriate for everyone. Before purchasing an annuity, it is important to understand the details of the product. Certain products may not be available in your state. The terms of each indexed annuity varies. It is always important to speak to a financial professional. about an annuity’s features, benefits and fees, and whether an annuity is appropriate for you, based on your financial situation and objectives. Participation rates, cap rates and/or index spreads may be subject to change by the insurance company according to the annuity contract provisions. If the insurance company makes such changes, this could adversely affect the return. Guarantees of an indexed annuity are backed by the claims-paying ability of the underwriting insurance company. The surrender charge period for a product may be longer, and the surrender charges may be higher than other annuity products. Indexed annuities are long-term investments. If the annuity contract is surrendered early, there is the possibility of a surrender charge being imposed and/or the funds may be subject to income taxes. The IRS may also impose a 10% penalty on withdrawals prior to age 59 ½, depending on the circumstances. With indexed annuities, there is the potential to lose money, depending on the product charges and minimum guarantee contract provisions. For additional information on annuities, reference the following websites: The FINRA (www.FINRA.org), the Securities and Exchange Commission (www.SEC.gov), Insured Retirement Institute (www.irionline.org), the National Association of Insurance Commissioners (www.NAIC.org) or your state's insurance department.