Health Savings Accounts

A health savings account is like an IRA for medical expenses, but only better. Your contributions to it are deductible and when you take money out for medical expenses, it isn't taxable.  In reality, you have shifted medical expenses from itemized deductions subject to a reduction of 7.5% of your adjusted gross income to page 1 of the tax return where it is 100% deductible. You must be covered under a high deductible health plan and you cannot be enrolled in medicare. You can even make contributions for the previous tax year by the due date of the return, so for 2010 you had until April 18, 2011 to make a tax deductible contribution. I like it.

Great I got a tax refund!

No it is not such a great thing. You have just loaned the government your money interest free by having too much withholding or estimated tax payments. You are just getting your own money back. You should strive to break even with the government  at tax time.

How do I become a resident of Florida?

It would be nice to live in a state that has no income tax like Florida or Texas, and many people claim that they do live in these states. In case of a dispute, how does a court determine your tax residency? It is a facts and circumstances test. The court looks at where you vote, where you have your driver's license, where you get your mail, where you have your safe deposit box, the amount of time you spend in a state, and also your intent. One item they don't consider is that you just want to save on state income taxes. Some states like New York and California are very aggressive in tracking down former residents for taxes so get the facts in your favor.