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what deductions beyond the standard deduction are typical?
Someone making $100k is very likely to itemize instead of take the standard deduction, they can deduct state taxes, mortgage interests, health care costs, etc. Someone making $100k is also very likely to contribute to a 401(k).
And this is the worst case, an individual with no kids. A family making $100k is going to pay a lot less.
There were other types of businesses in the Detroit area as well, the decline in the auto industry was just the catalyst. Detroit wasn't the only high growth city in that era to decline. People living in Detroit, Pittsburgh, etc during their growth era would say the same things you are saying about NYC....
pittsburgh was a city dependent on steel. almost all of pennsylvania depended on steel and/or coal. neither pittsburgh nor detroit was at all a diversified economy. and that's why those catalysts destroyed the towns. pittsburgh is doing well at reinventing itself at the moment now though. again, not very good comparisons to the economics of NYC.
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Originally Posted by user_id
Of course you don't, you just bought a house. But the numbers don't work out, the salaries in the younger generations can't support current evaluations in the Northeast, West Coast, etc even if everyone with a salary greater than $100k moved to these areas. Only 15% of households make more than $100k/year, but most of these households are older folks.
honestly, if you think households in NJ with people in their late 20s and older aren't making well over $100k/yr, you obviously know very little about the NYC metro area. it may be true of the rest of the northeast, I honestly don't know. but many young households in NJ, NYC, Long Island, and CT make over $100,000. in fact, nearly any college-educated household in NJ with 2 earners is making $100,000+, if they are in the business world. starting salaries 7 years ago were around $50,000 with a business degree in NYC. they leveled off in 2007 and 2008, but have started to rise again.
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Originally Posted by user_id
The environment that our parents purchased homes it was much different, they purchased homes back when the prices were reasonable and gained from rapid appreciation for 2-3 decades. That was a generational event, the boomer cohort bid up real estate by continuously upgrading their properties and now they have paper equity. Unless you believe that you can't get something for nothing, that paper equity as a whole will vanish.
Sorry, you're not going to be able to use your home as an ATM, its going to be a money pit.
i have no expectation of using my home as an ATM. it's a place to live, that's all. but when what i was paying each month in rent can buy me a 1700 sq ft home with the same commute to NYC as my 1250 sq ft apartment had, except now i have a backyard, a decent school system, and open space in my town, on top of building equity (even if it's less than what i purchased for...i'm coming out ahead of renting. and if i'm looking to sell 10 years from now, as long as i'm not moving to a drastically different market than what i live in now, it doesn't matter if prices go up or down.
people need to stop viewing their home as an investment vehicle and more as a place to live in.
Someone making $100k is very likely to itemize instead of take the standard deduction, they can deduct state taxes, mortgage interests, health care costs, etc. Someone making $100k is also very likely to contribute to a 401(k).
And this is the worst case, an individual with no kids. A family making $100k is going to pay a lot less.
yeah, i have a kid for 2011, so i'll get a better scenario than last year. but married, with the standard deduction and having paid quite a bit of interest on our mortgage, i'm not that much further ahead of the standard deduction than people would think. the standard deduction goes pretty far.
but yeah, 401k is probably my biggest tax avoidance. but i don't really view it as such, since i'll pay taxes on it in 30 years. the government gets theirs one way or another.
Someone making $100k is very likely to itemize instead of take the standard deduction, they can deduct state taxes, mortgage interests, health care costs, etc. Someone making $100k is also very likely to contribute to a 401(k).
And this is the worst case, an individual with no kids. A family making $100k is going to pay a lot less.
Really? Cuz if they don't have a house or a kid, they won't have one damn deduction. That was me...making more than $100k for over 5 years and not deducting a single thing bc I couldn't get past my one time personal deduction...if you can't get past that, you can't itemize anything else. And that's like 8 grand. Oooooooooh...8 grand.
pittsburgh was a city dependent on steel. almost all of pennsylvania depended on steel and/or coal. neither pittsburgh nor detroit was at all a diversified economy.
Pittsburgh was no more dependent on steel than NYC is dependent on finance. Every city has its key industries, businesses tend to cluster around each other. In terms of Pittsburgh reinventing itself, its population is still declining and is less than half of what it use to be. Similar stories for other rust-belt cities.
No city, or region remains top dog for forever, in fact its likely that the cycles in real estate pay a big role in the ebb and flow of regional economies.
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Originally Posted by bradykp
honestly, if you think households in NJ with people in their late 20s and older aren't making well over $100k/yr, you obviously know very little about the NYC metro area.
I have no idea what you're trying to claim here, I'm not suggesting that no 20-something households make $100k or more, I'm suggesting that there aren't enough of them to support current real estate prices. The median household income in NJ is $70k, so obvious most households in NJ old and young aren't making $100k.
In terms of rental parity, I've seen no numbers that indicate that the NYC metro area is even close to rental parity, let alone in the situation that you are claiming.
Really? Cuz if they don't have a house or a kid, they won't have one damn deduction. That was me...making more than $100k for over 5 years and not deducting a single thing bc I couldn't get past my one time personal deduction....
Again, I was trying to describe what would be typical. Owning a home and contributing to a retirement account are very common in the $100k/year cohort...
Two kids, maxed out 401k, maxed out IRA, and we still paid 22% thanks to AMT. Loved the article from CNN about the former investment banker who made $50k more than we did this year and paid only 1%. <sigh>
Last edited by formercalifornian; 04-18-2011 at 08:41 PM..
yeah, i have a kid for 2011, so i'll get a better scenario than last year. but married, with the standard deduction and having paid quite a bit of interest on our mortgage, i'm not that much further ahead of the standard deduction than people would think. the standard deduction goes pretty far.
Huh? Given what you've said your itemized deduction should be almost 3 times your standard deduction.
Pittsburgh was no more dependent on steel than NYC is dependent on finance. Every city has its key industries, businesses tend to cluster around each other. In terms of Pittsburgh reinventing itself, its population is still declining and is less than half of what it use to be. Similar stories for other rust-belt cities.
you're right, to a point. NYC has a lot of other businesses and industry though. So when people stop needing financial products, like they stopped needing steel, then maybe we'll start worrying some in NYC area. give me a ring when everyone stops using banks and companies stop needing to finance deals.
Quote:
Originally Posted by user_id
No city, or region remains top dog for forever, in fact its likely that the cycles in real estate pay a big role in the ebb and flow of regional economies.
I have no idea what you're trying to claim here, I'm not suggesting that no 20-something households make $100k or more, I'm suggesting that there aren't enough of them to support current real estate prices. The median household income in NJ is $70k, so obvious most households in NJ old and young aren't making $100k.
In terms of rental parity, I've seen no numbers that indicate that the NYC metro area is even close to rental parity, let alone in the situation that you are claiming.
the median household income in NJ is affected by the lower general incomes of the south region and the northwest region, as well as the numerous urban environments where income is lower. incidentally, real estate prices in all of those areas is lower.
my town, in the 2000 census, had a median household income of $90,334. the median household income for families was $106,233.
another stat i found as i was perusing...median amount spent on vacations (household per year)...$8,314. i found this kind of interesting to the OP where the middle class folks in america supposedly spend $10,000/yr. funny that the median vacation cost per year in a town right outside NYC is significantly lower than the $10,000 we all need to be considered middle class.
as for rental parity, i don't have full statistics, just what i see personally from friends who are renting in the towns where most residents are renters such as Hoboken or parts of Jersey City. also, just the general discussions and things i read locally that speak about the rising rental rates and such.
Huh? Given what you've said your itemized deduction should be almost 3 times your standard deduction.
well, the standard deduction adds up to $11,400 between myself and my wife.
now, other than mortgage interest, what is deductible?
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