Work in NJ and Live in NYC vs. Work in NYC and Live in NJ? (Maplewood: for rent) - City-Data Forum

knicksin8 · 02-27-2012, 08:34 AM

I work from home, but my wife currently works in Bridgewater, NJ. She is considering two jobs: one in Somerset, NJ and one in Manhattan.

We currently rent in NJ, but we wish to purchase a house in the near future. Our combined income will be about $200,000. We plan on sending our
two children to Catholic/private schools regardless of which state we live in.

Is the net tax situation worse if one works in NJ but lives in NYC compared to working in NYC but living in NJ?

Of course, it is easier to live and work in the same state, but we are also exploring the scenarios posed in my question above. I have heard that NYC
income tax is high, but I wonder if the relatively low property tax on a house purchased in NYC would offset that in a sense?

If anyone has such an experience, I would greatly appreciate any useful feedback. Thank you in advance!

sonofagunk · 02-27-2012, 09:57 AM

alot depends on if you plan to own a house/condo and how much you make. Property taxes in NYC are relatively low, but they have a city income tax to make up for it. NJ has high property taxes. I find that a person who makes X can afford a Y house/condo. NYC tax on X + NYC property tax on Y pretty much equals NJ property tax on Y. So if you are you are buying a place that is close to your max, it is kind of a wash (same for renting, since the rent just has the proerpty tax hidden in there, and you still pay city tax).

With that said, I find that NYC tends to pay more. Sure people have counter examples to the above statements, but I ran the number for my family (1 income professional)

nybbler · 02-27-2012, 07:13 PM

If you work in Manhattan you'll be paying NYS tax on that income. If you live in NYC you'll be paying NYC tax on ALL your income -- and that's killer, over 3.5%. NJ income tax is much lower.

Property tax is a much trickier beast, as it is high but varies a lot across NJ. You'll pay a lot less for the same-priced house in Millburn than neighboring Maplewood, for instance -- but on the other hand, you'll pay more for a similarly situated house in Millburn. NYC property tax rates are lower, but on the other hand the condo/co-op fees are enormous; in NJ you can get a single-family with no such fees if you like.

In general, I can't see you coming out ahead tax-wise living in NYC, unless you were considering very unequal properties in the two places.

sonofagunk · 02-28-2012, 05:59 AM

200K in NYC, extra $7 in NYC tax. $200K buys around a $850K house (with 20% down). Taxes in a good neighborhood in NJ would be around $16K. $850K condo in NYC is around $9K in property taxes. So in both places you pay $16K

might save a little in one of the situations on state taxes with 1 working in NJ, but not that much.

skartush · 03-01-2012, 02:33 PM

I live in Jersey and work in Manhattan. The tax is issue is somewhat of a moot point. It works like this: you pay your taxes to New York because you work there and the taxes are taken out of your paycheck. Then when April 15th rolls around, New York will credit New Jersey with the taxes you paid NY because the two states have a "sharing" agreement. There may be a fee for the credit transfer (which is probably taxed, tee hee), which only makes working out of state negligably more expensive. Depending on where you live, you wife should consider working in NY because of the higher salaries there. However, if you live near Bridgewater, her commute could be a murky time-suck from hell. Its extremely depressing to come home at 9pm every night, and could be a strain on the marriage after a long day without each other.

tdstyles · 03-01-2012, 02:50 PM

Quote:

Originally Posted by skartush

I live in Jersey and work in Manhattan. The tax is issue is somewhat of a moot point. It works like this: you pay your taxes to New York because you work there and the taxes are taken out of your paycheck. Then when April 15th rolls around, New York will credit New Jersey with the taxes you paid NY because the two states have a "sharing" agreement. There may be a fee for the credit transfer (which is probably taxed, tee hee), which only makes working out of state negligably more expensive. Depending on where you live, you wife should consider working in NY because of the higher salaries there. However, if you live near Bridgewater, her commute could be a murky time-suck from hell. Its extremely depressing to come home at 9pm every night, and could be a strain on the marriage after a long day without each other.

Tax point is not moot. If you live and work in NYC you pay a 3.5% NYC tax. Yes income tax rates on the state level are similar but the 3.5% is additional and exclusive to those that live in NYC. On $200K that's an additional $6000 in income tax.