When you owe the Internal Revenue Service (IRS) back taxes, penalties, and interest, it can be very overwhelming to try to address the debt you owe. However, when you are nearing retirement age or have retired, it is especially important to address this liability before the IRS takes money from your retirement account. It’s important to know how Florida retirees can reduce IRS back taxes and protect their retirement accounts.
The Benefits of Florida Tax Laws for Retirees
There are many reasons why retirees enjoy Florida for its tax benefits. This includes benefits like the fact that there are no taxes on personal income, on Social Security benefits, or on retirement income at the state level. There is also no inheritance or estate tax, making it easier to pass assets to your loved ones.
However, when you are a retiree, these tax benefits are only beneficial if you address your existing tax debt and plan for your future tax responsibilities.
Settling Your Tax Debt as a Retiree in Florida
Usually, when you owe the IRS a tax debt, you have to pay that debt entirely. However, many retirees are working on restricted income and lower budgets. Because of this, you may not have the income you need to pay back your tax debt.
The IRS is open to negotiation when paying off your debt would stop you from meeting your basic living needs or isn’t financially possible. There are several options for negotiating tax debt with the IRS, including:
- Currently Not Collectible status: This pauses collection of your IRS tax liability for temporary financial hardship.
- An installment agreement: The IRS offers a payment plan called an installment agreement. These agreements give you more time to pay back the full debt you owe, rather than requiring a lump sum payment.
- Penalty abatement: IRS penalties can include failure to file, failure to pay, information accuracy, and more. Penalty abatement can remove some of these penalties and any interest. This can make the full liability much more manageable. You may qualify for a first-time abatement or a reasonable cause abatement.
- Innocent spouse relief: Your debt may be forgiven by the IRS if it was caused by a spouse through joint filing, but you did not benefit from the money your spouse saved.
- An offer in compromise: This form of debt settlement can clear your entire tax debt for a lesser amount paid. They are very useful but very hard to get. The IRS accepted 21.4% of the offers in compromise that were proposed in 2024.
Negotiating these debt settlement options can pause many types of collection actions, potentially preventing levies on your bank or retirement accounts. When you work with an experienced Miami IRS tax attorney, they can determine which options you qualify for, which apply to your financial ability, and what is most useful for your financial future.
Avoiding Future Tax Issues
Although you may have fewer obligations as a retiree, you still have certain tax responsibilities. Once you have addressed your tax debt, this puts you in a better position with the IRS. However, you may still be under scrutiny because you had tax debt owed, and it is important that you maintain compliance. The most effective way to protect your retirement income is to hire a tax preparation lawyer. A tax preparation can help with many things, including:
- Assessing your obligations to the IRS and the state tax agency
- Creating a plan for legal tax avoidance now and into the future
- Helping file the right tax returns on time and accurately
- Avoiding errors in the process
- Answering your questions about taxes as a retiree
- Strategizing a plan to efficiently deal with your future tax responsibilities
- Helping gather and organize important financial and personal information
Overall, a lawyer helps limit your stress and mitigate the risk of errors. Errors can lead to penalties, notices, and more serious penalties, so it is much better to be proactive and avoid them.
FAQs About Retirees IRS Back Taxes in Florida
When Do Seniors Stop Paying Taxes in Florida?
Generally, seniors do not stop paying taxes in Florida at any specific age. However, there may be benefits for those in Florida who are 65 years or older. There are benefits for seniors paying property taxes. These benefits allow you to reduce the property taxes you have to pay if your locality adopted the benefits. Additionally, seniors who have an income under a certain amount may be exempt from having to file federal income taxes.
Are Retirement Accounts Protected From the IRS?
Yes, retirement accounts are currently protected from most levies imposed by the IRS through IRS policy, but not by law. The IRS policy states that retirement savings could be levied if there was flagrant conduct by the taxpayer. It can be helpful to discuss the IRS policy with a skilled attorney. When you hire a tax preparation lawyer, they can help you plan methods to limit your risk of losing your retirement savings.
Why Are Retirees Leaving Florida?
There may be several reasons that retirees are leaving Florida, one of which is increasing home prices. Median housing listing prices in Florida peaked in 2022 at $493,500 and have trended down since, but are at $425,000 as of late 2025, which is much higher than the nearly $330,000 median at the end of 2019. According to the U.S. Census, nearly 62% of homes in Florida are valued over $300,000 up to $1 million.
How Do Florida’s Taxes Affect My Retirement Income?
Florida taxes are incredibly beneficial for retirement income, as there is no personal income tax, no tax on retirement income, and no tax on Social Security benefits. However, there are still federal taxes to consider, and other state taxes you might be responsible for as a retiree living in Florida, like property taxes. To understand your tax obligations, you should talk with a tax attorney in Florida.
Hire a Tax Preparation Lawyer at TaxSmith, LLC Today
For more than a decade, TaxSmith, LLC, has helped taxpayers in Florida deal with tax debt and protect their assets. We know the options for IRS tax debt, and we want to find the right method to resolve your stressful situation. Reach out to our firm today and see how our dedicated and compassionate team can help.
