[info_seeker]

Hi, I tried a lot to find specific information on my query, but couldn't find it and thus decided to post. Please pardon me if this question has already been answered previously.

I currently live in NYC, and recently got a full time job in downtown NY. I am now looking to move somewhere close to my work-place, and the two options I have is to either move to NJ (jersey city) or somewhere in Midtown. Ignoring the differences in rents, I want to know if there will be any tax savings if I move to NJ (jersey city). And if there are any savings (be it state tax or city tax or any other tax saving), can someone please let me know the amount of that saving based on my salary level. I am currently single, and my salary is in the 70-80k bracket. I plan to either rent a small apt. or share it with someone where-ever I decide to move.

Thanks in advance for your help.

[AtlantaTaxExpert]

It is likely that moving to New Jersey will be the best move money-wise.

Because you will be working in NY, you will have to pay NY state taxes regardless of where you live.

You do NOT have to pay NY city income taxes because you will not live in NYC.

You will have to file a NJ tax return, but you will not have any NJ tax liability, because the credit given for NY taxes paid will likely completely offset any NJ taxes.

The savings in NOT paying NYC taxes will be the key and will more than offset any commuter costs.

[info_seeker]

Hi Atlanta Tax Expert,

Thanks a lot for your help. Can you tell me how much would I save in city tax if I live in NJ. As I mentioned earlier, my salary range is 70k-80k, and I am currently single and will be renting an apt. If you can give me an approximation, that would really help me making a decision.


Thanks once again for all your time and help.

[shakatah]

All else being equal, your tax "savings" will generally be the amount of taxes you would pay to NYC for income tax. The NYC tax table for 2006 is http://www.nyc.gov/html/dof/html/pdf.../pit_rates.pdf

According to the 2006 NYC tax table if you are filing "Single" you would pay $2435 in taxes at $70K and $2800 at $80K if you live in NYC. Living in NJ and working in NYC: You still pay NY state taxes and the amount of NJ taxes your would owe on that salary should be totally offset by what you pay in NY state taxes.

Bottom line is, generally speaking.. assuming all other things being equal and filing SINGLE your disposable income would increase by between $2435 and $2800.

[AtlantaTaxExpert]

Well done. Shakatah!