Will work in Indian Head MD

[spleuchan]

Originally Posted by ChristineVA

I guess that depends on your perspective of what is "a little more."

When I moved from Maryland to Virginia, I was making $40,000. I was claiming Married with 1 exemption for my federal/state tax withholding. When I moved to Virginia, I ended up netting $75 per pay period in payroll taxes. That was close to $2,000 in my pocket annually based on my 26 pay periods. My husband saw the same.

Of course, we then had to turn around and pay personal property tax on our vehicles of which we had two at the time but I think out of the approximately $4,000 we cleared on taxes, we lost about $600 for that. I can only image that the more you make, the more you get back in your pocket for the payroll taxes.

The other thing about Maryland is that while the housing can be significantly cheaper in areas like PG County or Charles County, the closing costs if you are buying are high. It's been years since I lived in Maryland and maybe that has changed but it was quite a bit more that you had to come up with when closing.

Having said all that, I think living in NoVA is a lose/lose situation for the OP. Even with the payroll tax difference, his commute costs and time will obliterate any savings.

You can withhold what you want, but if you look at your actual tax return no way was there a $2,000 difference on a $40,000 salary. If so, you need to have someone else do your taxes for you. Tax rate in VA is $720 + 5.75% of excess over $17,000. Tax rate in MD is $90 plus 4.75% of the excess over $3,000 plus a county income tax. In Chalres County it is 3.03% (which has increased some since I left). Adding those together you basically have 5.75% vs 7.78%. So the difference in income taxes is about 2%. A $2,000 increase based on $40,000 is a 5% difference. So, I call no way. I looked at my tax return in 2009 (MD) vs 2011 (VA) (2010 was a split year, so I skipped that one). On my tax returns it shows about a 2% difference, which makes sense. 5% difference does not.

So 2% of 75,000 is $1,500. MD doesn't have a car tax, so subtract that (depends on how old your car is). If you buy an equivalent house in Charles County vs NOVA (at least the part you would consider commuting from, no way would you want to commute from PWC), your house is going to be probably half the cost, so your property taxes will be less. MD also has a homestead act on property taxes, which was nice. That limits the amount your property taxes can increase each year, which worked out great for me since my property value increased a lot right after I bought it.

So yes, you will pay more taxes in MD, but it is very much overstated.

[ChristineVA]

Originally Posted by spleuchan

You can withhold what you want, but if you look at your actual tax return no way was there a $2,000 difference on a $40,000 salary. If so, you need to have someone else do your taxes for you. Tax rate in VA is $720 + 5.75% of excess over $17,000. Tax rate in MD is $90 plus 4.75% of the excess over $3,000 plus a county income tax. In Chalres County it is 3.03% (which has increased some since I left). Adding those together you basically have 5.75% vs 7.78%. So the difference in income taxes is about 2%. A $2,000 increase based on $40,000 is a 5% difference. So, I call no way. I looked at my tax return in 2009 (MD) vs 2011 (VA) (2010 was a split year, so I skipped that one). On my tax returns it shows about a 2% difference, which makes sense. 5% difference does not.

So 2% of 75,000 is $1,500. MD doesn't have a car tax, so subtract that (depends on how old your car is). If you buy an equivalent house in Charles County vs NOVA (at least the part you would consider commuting from, no way would you want to commute from PWC), your house is going to be probably half the cost, so your property taxes will be less. MD also has a homestead act on property taxes, which was nice. That limits the amount your property taxes can increase each year, which worked out great for me since my property value increased a lot right after I bought it.

So yes, you will pay more taxes in MD, but it is very much overstated.

I am not kidding you. When I moved, I netted an extra $75 per pay period on a $40,000 salary. I swear I am NOT making that up. This comprises the Maryland state tax and the county piggyback tax. My payroll/HR person at the time had also recently moved from Maryland to Virginia since the company HQ had moved from Landover to Alexandria and she had a very similar experience. All of us Marylanders that moved noted the same thing.

Now, I moved in 1994 so tax rates could have very well changed from when you moved. I will have to see if I can dig up those old tax returns when I get some free time. There is no reason that I would make this up.

[spleuchan]

Originally Posted by ChristineVA

I am not kidding you. When I moved, I netted an extra $75 per pay period on a $40,000 salary. I swear I am NOT making that up. This comprises the Maryland state tax and the county piggyback tax. My payroll/HR person at the time had also recently moved from Maryland to Virginia since the company HQ had moved from Landover to Alexandria and she had a very similar experience. All of us Marylanders that moved noted the same thing.

Now, I moved in 1994 so tax rates could have very well changed from when you moved. I will have to see if I can dig up those old tax returns when I get some free time. There is no reason that I would make this up.

There are many possible reasons. It was 20 years ago, maybe you are not remembering it correctly, maybe you changed your number of exemptions, maybe maryland withholds a greater percentage than virginia (get more back when you do your taxes), maybe virginia has drastically raised its income tax rate (probably not), maybe maryland has drasticaly decreased its tax rate (even less likely). When I moved from MD to VA, my take home pay did go up, although I don't remember exactly how much.

Bottom line is taxes are not a good reason to pick VA over MD. It would be penny wise and pound foolish. Maybe you save a few hundred dollars, but your mortgage for the same type of house would be much much higher and you would have a lot more commuting costs. Your standard of living would definitely be higher in Charles County than NOVA.

That's not to say there aren't potentially good reasons, such as lower crime. That's the main reason I moved to VA. I lived in Waldorf, and I definitely wouldn't recommend living there. La Plata is better crime wise. Schools could be a reason, but since your kid is in high school, La Plata is probably pretty equivalent to any school you could afford to be zoned in in NOVA.