Help my determine Paycheck (NJ vs Philly) (Philadelphia, Westmont: rent, HOA fees)

[RightonWalnut]

Originally Posted by frankgn87

Using your table my tax rate is 1.9%..

Okay, so you paying 1.9% in prop taxes in (I assume) Moorestown, NJ means you have a total tax rate of 8.27%

In Philadelphia, after AVI, someone will be paying a total of 8.298%

0.03% more to live in the city is not "THREE" times as much more... as you so kindly stated.

Also, 1.9% is the lowest in NJ, so convenient that you picked that. Collingswood, NJ, which you usually recommend people live in, has a property tax of 3.016%, meaning 9.386% in taxes total in Collingswood vs 8.298% in Philadelphia. Or Cinnaminson, 2.353% in property taxes for a total of 8.723%.

[frankgn87]

Ill copy and paste how a Philly residents pays **THREE** times I do.. Read it slow, maybe you will understand it this time..

lets see. I pay 6k a year for prop tax... we make close to 200k so wage tax would be $8k + $10k the taha will pay for a condo.. $6k vs $18k..

Originally Posted by Summersm343

Okay, so you paying 1.9% in prop taxes in (I assume) Moorestown, NJ means you have a total tax rate of 8.27%

In Philadelphia, after AVI, someone will be paying a total of 8.298%

0.03% more to live in the city is not "THREE" times as much more... as you so kindly stated.

Also, 1.9% is the lowest in NJ, so convenient that you picked that. Collingswood, NJ, which you usually recommend people live in, has a property tax of 3.016%, meaning 9.386% in taxes total in Collingswood vs 8.298% in Philadelphia. Or Cinnaminson, 2.353% in property taxes for a total of 8.723%.

[NatasNJ]

Originally Posted by frankgn87

Ill copy and paste how a Philly residents pays **THREE** times I do.. Read it slow, maybe you will understand it this time..

lets see. I pay 6k a year for prop tax... we make close to 200k so wage tax would be $8k + $10k the taha will pay for a condo.. $6k vs $18k..

Maybe I am slow or missing something. Maybe both.

what is taha?

In NJ you pay 6.37% on your income(NJ income), PA would be 6.998% (City Wage & PA). Right?

Then living expenses would be based on where you live. You can always say one spot is going to cost you more than the other. All depends on where and what you buy.

[BPP1999]

Originally Posted by NatasNJ

Maybe I am slow or missing something. Maybe both.

what is taha?

In NJ you pay 6.37% on your income(NJ income), PA would be 6.998% (City Wage & PA). Right?

Then living expenses would be based on where you live. You can always say one spot is going to cost you more than the other. All depends on where and what you buy.

Yes - 6.37% in NJ, 6.998% in PA (state + city). That's income taxes.

Frank, I don't understand your point either. I think you typed something incorrectly. We all seem to agree that the income tax hit will be close in NatasNJ's situation. I don't see your logic on property taxes.

[frankgn87]

We are comparing Philly to NJ. I don't pay any city wage tax in NJ. I would in Philly. City wage at 200k a year would be $8000(which I do not pay in NJ) Taha(the op in the AVI thread) will be paying $10k a year for prop taxes after the AVI change in Philly for his condo. So.. If I lived there, I would be paying $18k a year($10k for prop taxes & $8k for wage tax) as compared to my property taxes of $6k a year where we are now. $18k a year in Philly and $6k a year in Jersey. .. I'm not talking income taxes, just the prop/wage tax..

[NatasNJ]

Originally Posted by frankgn87

We are comparing Philly to NJ. I don't pay any city wage tax in NJ. I would in Philly. City wage at 200k a year would be $8000(which I do not pay in NJ) Taha(the op in the AVI thread) will be paying $10k a year for prop taxes after the AVI change in Philly for his condo. So.. If I lived there, I would be paying $18k a year($10k for prop taxes & $8k for wage tax) as compared to my property taxes of $6k a year where we are now. $18k a year in Philly and $6k a year in Jersey. .. I'm not talking income taxes, just the prop/wage tax..

Still lost. Why are you excluding income taxes in your breakdown? Since NJ is DOUBLE the PA income tax level at salaries over 75k? Your NJ vs PA income tax % is SURELY not EQUAL at 200k. So that 12740 (NJ) vs 6140 (PA) So there closes the gap 6.5k. And you are comparing YOUR property to someone elses whose property is possibly more expensive than yours. Once again not a fair comparison.

Your 3x more scenario is meaningless since you pick and choose what you are comparing and the sides are clearly unbalanced.

[frankgn87]

Our homes are equal value. Including the higher income taxes in NJ, its still not even close..

[tom_567]

Originally Posted by NatasNJ

Still lost. Why are you excluding income taxes in your breakdown? Since NJ is DOUBLE the PA income tax level at salaries over 75k? Your NJ vs PA income tax % is SURELY not EQUAL at 200k. So that 12740 (NJ) vs 6140 (PA) So there closes the gap 6.5k. And you are comparing YOUR property to someone elses whose property is possibly more expensive than yours. Once again not a fair comparison.

Your 3x more scenario is meaningless since you pick and choose what you are comparing and the sides are clearly unbalanced.

You are right that it depends on the situation. In the original poster's situation, the income tax situation will probably be higher in the city by about 3-4%, keeping all other expenses (rents, parking, etc.) out of the equation (just for comparison purposes of state/local tax liabilities). It may be a little lower if the OP is able to itemize versus take the standard deduction.

NJ offers an income credit for taxes paid to another jurisdiction (Philadelphia wage qualifies) or a deduction/credit for property taxes. The NJ effective rates after all of the deductions/credits is usually much lower than the highest bracket. It's especially attractive for people who work in Philadelphia becuase you effectively no longer pay city wage tax (that money credits against your NJ state income tax liability).

If you live and work in NJ, you break even because of bridge tolls. Here's my experience in Collingswood (I work in NJ just like the OP):

4% effective NJ State income tax + 7% property tax (as a percentage of income) = 3% PA state tax + 4% Philadelphia wage + 2% property tax + 1.5% DRPA bridge tolls (pre-tax, 45 weeks/year)

For me, it's a difference of a $500/year or so in favor of PA. However, that's before expenses like increased rents, gas for commuting, monthly parking expenses, etc. Obviously, this isn't meant to be taken as tax advice, but it's just to help illustrate that the expenses can be much closer than it seems at first glance.

[NatasNJ]

Here is my current breakdown:

NJ:
State Income tax - 6.37%
Property Taxes - $8400/yr
Two Cars - $1300/yr Insurance + upkeep (~$2000/yr?) + gas (~$2400/yr)
Mortgage - ~$1500/m
Tax deduction - Probably $2000 savings.

PA:
State Income tax - 3.07%
City Wage Tax - 3.928%
Rent - ~$2200/m (assuming to rent vs buy for now)
One Car - ~$600/yr Insurance + upkeep (~$1000/yr?) + gas (~$600/yr) or Zero car and stick to car share.
Train(work commute) - ~1000/yr (worst case) probably closer to ~500 or less/yr. (commuter discounts)

So tough to figure out the (rent out house at hopefully at breakeven $) and tax deductions + rental income + house depreciation, etc... Assuming we rent out our house vs selling it. That is a future decision for sure. So just ballparking my current write off over std deduction in my ballpark tax bracket (probably a tad low but close).

So the quick numbers break out like this for me. Not taking into account possible savings/cost of utilities and minor things like that.

NJ costs me $39000/yr. PA costs me $38550.
So assuming the numbers above and assuming I am not missing anything drastic.
It is pretty damn close to a wash overall. Maybe even slight benefit for City. Assuming I can find a rental we like for $2200.

[BPP1999]

You may want to look into the car insurance. I could see it increasing in the city.

Either way, it looks like, from a financial standpoint, there's not too huge of a difference, so maybe you should do what you want to do.