Cincinnati vs. N. Kentucky Taxes (Hamilton, Fairfield: real estate, car insurance, credit)

[mulaman984]

Relocating soon to the area.....still deciding between downtown (CBD, OTR, etc) vs Newport/Covington.

I'm trying to understand the differences in taxes....Ohio has a lower income tax than Kentucky (by about 2%), but Cincinnati has a 2% city tax....so in the end, is it a wash between both locations (when just comparing taxes?)

Obviously, a lot more to consider than just taxes when it comes to choosing a place to live, but I just was wondering which is a "better deal" when strictly looking at taxes....

Thanks

[jlawrence01]

A couple things.

If you are working in the city of Cincinnati, where you live is a moot point. The 2% is charged to anyone who works in the city whether they live there or not.

If you are relocating to Cincinnati with an existing employer, generally the best person to ask is the person doing payroll for the company as they can tell you the tax and withholding rates.

In general, I would say Kentucky but YOU have a specific situation so you need to do your research. Ohio is a high tax state and if you have the misfortune of living in one community with an city income tax and working in another city with an income tax, you will find yourself preparing tax returns in both cities and potentially paying taxes in both cities.

If you are running your own business, you can set it up and work in an unincorporated area like Anderson and pay no city income tax.

[mulaman984]

Thanks. From my research, Ohio and Kentucky are reciprocity states...meaning since I will be working in Kentucky, but living in Ohio...I simply fill this form out http://revenue.ky.gov/NR/rdonlyres/B...4/0/42A809.pdf and my employer should not withhold KY taxes (I'm not sure if they are setup to be able to go in and with hold OH).

[jlawrence01]

Originally Posted by mulaman984

Thanks. From my research, Ohio and Kentucky are reciprocity states...meaning since I will be working in Kentucky, but living in Ohio...I simply fill this form out http://revenue.ky.gov/NR/rdonlyres/B...4/0/42A809.pdf and my employer should not withhold KY taxes (I'm not sure if they are setup to be able to go in and with hold OH).

I have done payroll for multi-state sites and in St. Louis (MO/IL) and Chicagoland (IL/WI).

If you live in Ohio and work in Kentucky, your employer will withhold and remit the taxes to Ohio. Where you WILL run into issues is that you MAY owe taxes in the city that you live in. In general, Kentucky employers do NOT withhold that. You will need to research that and see what your resident city requires.

I have worked/lived in eight states and I have found that Ohio state and local taxes are the most confusing and unduly complex. In your situation, I would live in Kentucky adn not deal with the hassle.

[ghostrider7811]

I am being transferred to Ohio for work. The office is in Mason Ohio. I work in the field and very rarely go to the office. I am looking for a house , using Mason as ground zero.


The property taxes appear to be much higher in Ohio VS Kentucky. This is just comparing like houses.
I did read about folks working in KY but living in Ohio. I am thinking the opposite. Living in KY and working in Ohio. Most of my territory is North of Cincinnati. So if I live in KY it would add to my driving time by 50 minutes or so.


Are my tax findings true ? Ideas and suggestions are welcomed.


BTW, I will have one kid in public school, 5th grade. 2 other kids , taking college on line.


Thank you much Jim

[Sarah Perry]

Originally Posted by ghostrider7811

I am being transferred to Ohio for work. The office is in Mason Ohio. I work in the field and very rarely go to the office. I am looking for a house , using Mason as ground zero.


The property taxes appear to be much higher in Ohio VS Kentucky. This is just comparing like houses.
I did read about folks working in KY but living in Ohio. I am thinking the opposite. Living in KY and working in Ohio. Most of my territory is North of Cincinnati. So if I live in KY it would add to my driving time by 50 minutes or so.


Are my tax findings true ? Ideas and suggestions are welcomed.


BTW, I will have one kid in public school, 5th grade. 2 other kids , taking college on line.


Thank you much Jim

I share your overall impression that property taxes are quite a bit higher in Ohio. It's hard to figure closely because a lot of property tax is based on what goes to the local school district, so it can vary quite a bit from district to district alone. What gets next to impossible is figuring the OVERALL tax burden for any given individual between the two states. Mason has a range of housing prices and a very well regarded school district and in your place I'd certainly look for a home there. Your driving time estimate is possibly reasonable, but doesn't factor in the ginormous tie-ups that happen frequently anytime there's an incident on the interstate, or even bad weather. To me, it's a commute no sane person would sign on for if they had an alternative. Buy a little bit less expensive house in Ohio and spend the time you'd otherwise spend commuting with that 5th grader. They'll thank you for it.

[jlawrence01]

Originally Posted by ghostrider7811

I am being transferred to Ohio for work. The office is in Mason Ohio. I work in the field and very rarely go to the office. I am looking for a house , using Mason as ground zero.

The property taxes appear to be much higher in Ohio VS Kentucky. This is just comparing like houses.
I did read about folks working in KY but living in Ohio. I am thinking the opposite. Living in KY and working in Ohio. Most of my territory is North of Cincinnati. So if I live in KY it would add to my driving time by 50 minutes or so.

Are my tax findings true ? Ideas and suggestions are welcomed.

I have a few ideas.

First, real estate taxes for every property in Hamilton Co. is available online. If you see a house that you are interested in, go to the county recorders website and look at the recent tax data. Kentucky probably does the same. You CANNOT rely upon MLS data.

Second, when your search is down to 2-3 municipalities, call your friendly payroll person to determine the local income tax rates for the communities you are interested in. In Ohio, MANY cities levy an income tax on BOTH residents and nonresidents who work in that community. There is occasionally but not always a tax credit.

if you are working in Mason, you will pay local income tax in Mason and the community you live in. To get around that, live in Mason OR live in a town or city without an income tax OR live in a unincorporated township area (Anderson).

Most of my friends over the years have migrated from the city of Cincinnati to Anderson or Kentucky and the two reasons are taxes and schools.

I have managed payroll for a manufacturing company with operations in 20 states and I can honestly say that Ohio's state and local income tax scheme is one of the most complex in the country. It does guarantee full employment for CPAs. (g)

[Sarah Perry]

Originally Posted by jlawrence01

I have a few ideas.

First, real estate taxes for every property in Hamilton Co. is available online. If you see a house that you are interested in, go to the county recorders website and look at the recent tax data. Kentucky probably does the same. You CANNOT rely upon MLS data.

Second, when your search is down to 2-3 municipalities, call your friendly payroll person to determine the local income tax rates for the communities you are interested in. In Ohio, MANY cities levy an income tax on BOTH residents and nonresidents who work in that community. There is occasionally but not always a tax credit.

if you are working in Mason, you will pay local income tax in Mason and the community you live in. To get around that, live in Mason OR live in a town or city without an income tax OR live in a unincorporated township area (Anderson).

Most of my friends over the years have migrated from the city of Cincinnati to Anderson or Kentucky and the two reasons are taxes and schools.

I have managed payroll for a manufacturing company with operations in 20 states and I can honestly say that Ohio's state and local income tax scheme is one of the most complex in the country. It does guarantee full employment for CPAs. (g)

Great posting with a lot of helpful information. My husband and I were mostly retired (with some pension and incidental employment income) when we tried--I admit half heartedly--to compare the overall tax burdens for our specific situation between Kentucky and Ohio. Where we really bogged down was trying to guess at the state level.

[jlawrence01]

Originally Posted by Sarah Perry

Great posting with a lot of helpful information. My husband and I were mostly retired (with some pension and incidental employment income) when we tried--I admit half heartedly--to compare the overall tax burdens for our specific situation between Kentucky and Ohio. Where we really bogged down was trying to guess at the state level.

The BEST way to accomplish this would be to find a CPA who specializes in taxes and buy an hour or two.

I have to admit that on my recent move to Arizona, I thought that I knew exactly what I needed to how to minimize my state tax liability. However, after preparing my taxes the past two years, I can say that there are several things that I have learned.

[lydunn]

I can only speak on Cincinnati and Louisville. And I thought that the property taxes for pretty much similar the only big difference is that I did have to file a local city tax for Fairfield Ohio but my car insurance went up about 30% when I lived in Louisville and it also cost much more to renew your tags.