TaxBird Makes Tax Time Easier for Seasonal Southwest Florida Residents
The TaxBird app helps part-time Florida residents keep track of how many days they spend at their second homes for tax purposes.
Co-founders Brian Ochs, left, and Jim Simon
It's a problem every part-time Florida resident is all too familiar with: owing income tax in another state. Florida’s lack of income tax makes it a top choice for buying a second home or retiring. But for those who still maintain a residence in the Northeast or Midwest, tax time isn’t stress-free.
Each state has a specific number of days you’re allowed to be there, after which you’re considered a resident—and owe state taxes come April. Jim Simon, who has a Connecticut vacation home, was using an Excel spreadsheet to make sure he kept his time in Connecticut below the 183 days that declared him a resident. When he mentioned this to his business partner Brian Ochs in passing, Ochs asked, “Why don’t you just use an app?” When Simon’s search for one came up empty, they decided to create their own.
The TaxBird app tracks your whereabouts through your phone’s GPS and location services year-round. TaxBird (a play on “snowbird”) is as automated as possible, meaning you don’t have to do much between the initial personalization and tax time. In addition to a countdown clock that states how many more days you can spend in another state without being considered a resident, TaxBird sends warnings through text or email when your days are numbered.
At the end of the year, the app emails you a summary outlining the number of days you spent in each state plus a detailed four-page report proving you don’t owe state taxes elsewhere. It can cost tens of thousands of dollars in attorney fees to create these types of reports after the fact during an audit.
“We didn’t build the app to cheat the system; we built it for monitoring. People are attached to their phones. It’s their life now, so it made sense to track days that way,” said Simon.
The TaxBird team was at a trust conference last October in Delaware, where they launched and debuted the app. The reaction was overwhelmingly positive.
“It wasn’t really a tech audience, so we were surprised people were so into it,” Simon recalled.
It was an immediate hit with accountants and lawyers—especially estate attorneys. Aside from annual state tax issues, many part-time Florida residents own property in a state with hefty inheritance and estate taxes. The same TaxBird reports that establish residency can help people’s children prove their parents were Florida residents, thereby avoiding those fees.
Simon and Ochs see enormous growth potential for TaxBird. First, they plan to hire more staff and then expand the app to the other six states without income tax. Eventually, they hope to add in international residency requirements for Florida’s Canadian and European visitors, who may be in jeopardy of losing their health benefits or owing extra tax if they don’t meet their own residency minimums.
Simon’s previous commute from Connecticut to New York City for work inspired him to consider developing a version of TaxBird for out-of-state Manhattan commuters, who owe both New York and their home state taxes each year.