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Ah, things to consider. I love this one as I consistently nag the misses, who works in MA.
DISCLAIMER: MY situation might not be YOURS, run your OWN numbers!
When I was looking for positions (back living in Alabama, not too long ago). I was pretty hell bent about finding a position in NH for the very reason of income tax. Now, I had already decided I was moving back to NH, so with that being said it was the best choice for me.
Here's how I look at it.
1. Work/Live in MASS
a) I am SALARY with bonuses that works 40 or less a week (never met anyone in my field who was hourly either Sparkle! Non-egotistical engineer). Doing the calculation of what my salary (expected at the time) would be, I determined that the income tax I would be paying. [a) = 0.057x , x = salary)
b) I narrowed down where I would like to live in MA. Cape Ann/North Shore. Higher property taxes.
c) I calculated average living costs, transportation expenses, TIME spent in TRAFFIC (my time is expensive, yours is too).
a) + b) + c) = Work/Live in MASS
2. Work in Mass, Live in NH
Now, assume you got that job in Boston but you want to purchase in Londonderry; look up that tax rate yet??? ;-) We can now add "D" to the equation.
d) Property taxes in Londonderry (let's just "say" another $6-8,000/year)
a) + c) + d) = Work in MASS, live in NH
3. Work in NH, Live in NH
Pay the high property tax, but offset that with no income tax, no massive commute, and no traffic
c) + d) = Work/Live in NH (with c being reduced because of commuting costs being less)
For ME (not necessarily you) it made much more sense to work/live in NH. The roads are horrific, traffic is endless, and getting around in general in MA is terrible. And, not to mention, I used to work in that "lovely" city of Boston and spend half the evening in the car listening to the radio tell me that I was in traffic on 93; ya don't say? So, after my brief study into it, it was determined that I'd be losing a lot of money working Mass; something I don't take lightly. For me it worked out that I could have a very nice home, in a higher bracket, and still pay less living/working in NH than compared to working in Mass.
Weigh your options. If you're stellar at what you do and project yourself, it won't matter what office you're in. And by my swift calculation, you've got a good salary coming to you that will only grow; trust me, when it grows you'll pay more, but the property taxes don't go away. If you want the Boston office, live on the NH line in Mass down 93. Don't pay both taxes.
are you married and does your partner work? MA considers the income of both people and then your MA income is taken as a percentage.
For example - if you earn $50K in MA and your spouse earns $50K in NH - you report $100K income on your federal return.
MA takes the $100K and divides it by your MA income = 50% is all you can count towards deductions, etc.
You can avoid some fees by filing separately, but not always.
Ah, things to consider. I love this one as I consistently nag the misses, who works in MA.
DISCLAIMER: MY situation might not be YOURS, run your OWN numbers!
When I was looking for positions (back living in Alabama, not too long ago). I was pretty hell bent about finding a position in NH for the very reason of income tax. Now, I had already decided I was moving back to NH, so with that being said it was the best choice for me.
Here's how I look at it.
1. Work/Live in MASS
a) I am SALARY with bonuses that works 40 or less a week (never met anyone in my field who was hourly either Sparkle! Non-egotistical engineer). Doing the calculation of what my salary (expected at the time) would be, I determined that the income tax I would be paying. [a) = 0.057x , x = salary)
If you live in NH, it depends on where your paycheck comes from (MA-based or somewhere else), as to (partially) determine what you owe MA income tax on, if you are working at home or traveling out-of-state... It can get complicated, but that is what tax accountants are for.
b) I narrowed down where I would like to live in MA. Cape Ann/North Shore. Higher property taxes.
On a per-square-foot basis of the house, not much different than southern NH...(in a decent town)
You didn't indicate what town/city you will work in. Property tax rates are lower in MA, but the houses cost more, so it is a wash. But don't listen to me, as I only lived in New England since I was six. (But not anymore... Woo Hoo!)
c) I calculated average living costs, transportation expenses, TIME spent in TRAFFIC (my time is expensive, yours is too).
Depends on where you work, and what you do for a living. Boston Express was a dream (with wifi, so you could either sleep or do work during the commute.
a) + b) + c) = Work/Live in MASS
2. Work in Mass, Live in NH
Now, assume you got that job in Boston but you want to purchase in Londonderry; look up that tax rate yet??? ;-) We can now add "D" to the equation.
If you want a nice town, try Windham. Before I moved out, it was $2K a month for property taxes. But it would have been just as bad in MA for the same house.
d) Property taxes in Londonderry (let's just "say" another $6-8,000/year)
a) + c) + d) = Work in MASS, live in NH
3. Work in NH, Live in NH
Pay the high property tax, but offset that with no income tax, no massive commute, and no traffic
c) + d) = Work/Live in NH (with c being reduced because of commuting costs being less)
Best choice, though jobs are much more limited.
For ME (not necessarily you) it made much more sense to work/live in NH. The roads are horrific, traffic is endless, and getting around in general in MA is terrible. And, not to mention, I used to work in that "lovely" city of Boston and spend half the evening in the car listening to the radio tell me that I was in traffic on 93; ya don't say? So, after my brief study into it, it was determined that I'd be losing a lot of money working Mass; something I don't take lightly. For me it worked out that I could have a very nice home, in a higher bracket, and still pay less living/working in NH than compared to working in Mass.
Absolutely agree.
Weigh your options. If you're stellar at what you do and project yourself, it won't matter what office you're in. And by my swift calculation, you've got a good salary coming to you that will only grow; trust me, when it grows you'll pay more, but the property taxes don't go away. If you want the Boston office, live on the NH line in Mass down 93. Don't pay both taxes.
I didnt realize both salaries would be taxed by MA even though my wife live/work in NH, this is very bad news and changes my math to where the boat for MA is sinking a bit more then I can bail.
Tell me this, if I pay all these taxes, do my children get to utilize the MA universities at instate tuition rates? This could offset as I have two that would benefit from this in the not too far future.
Well said, "Weigh your options. If you're stellar at what you do and project yourself, it won't matter what office you're in."
I am leaning closer to work/live in NH and if need be transfer to Boston if my career is stalling from the smaller office.
are you married and does your partner work? MA considers the income of both people and then your MA income is taken as a percentage.
For example - if you earn $50K in MA and your spouse earns $50K in NH - you report $100K income on your federal return.
MA takes the $100K and divides it by your MA income = 50% is all you can count towards deductions, etc.
You can avoid some fees by filing separately, but not always.
There ARE ways around this.
Filing joint on Federal and handling the MA separately is commonly done. If you're working with an accountant, or even an upgraded tax-handling software program (Quicken or TurboTax for Business, etc.) it's very easy, and you will get all of your federal deductions. No reason that MA should get even a sniff of income that isn't earned in the state... My SO works in MA, and he pays MA on only part of his income (works a few days each week at the NH facility or from home)
Filing joint on Federal and handling the MA separately is commonly done. If you're working with an accountant, or even an upgraded tax-handling software program (Quicken or TurboTax for Business, etc.) it's very easy, and you will get all of your federal deductions. No reason that MA should get even a sniff of income that isn't earned in the state... My SO works in MA, and he pays MA on only part of his income (works a few days each week at the NH facility or from home)
Exactly. Well said.
Back when I lived in NH, and worked in MA, MA had absolutely no information on income derived from non-MA sources, as it should be.
(Actually, to totally digress, reason #4,126 why to have an SO, but not be legally married. But let's save that for another thread).
Massachusetts figures that as you are using Mass services you should pay your share. Generally the differences in salary between the two states more than makes up the mass income tax.
Right. I worked for years in MA. The only services I got were the use of 20 miles of their highway. For that I paid thousands of dollars a year. Due to the way MA limits out of state filers' deductions, I paid more than if I had lived in MA.
Can my children go to MA universities at instate tuition rates since I am paying taxes?
No but Illegal Immigrants can!
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