Author Topic: Help figuring out taxes - living in NYC vs NJ  (Read 1458 times)

nanu

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Help figuring out taxes - living in NYC vs NJ
« on: February 14, 2015, 06:44:36 PM »
My girlfriend and I (she's 23, I'm 27) will be graduating from college in a few months, and starting jobs in NYC.
We were starting to look at apartments to rent, and noticed that there are locations in NJ that might
prove easy to commute from, and I was wondering about the tax differences between NJ and NYC.

Basically, we're interested in trying to figure out how much we would pay in taxes (state+federal) if we rent an apartment
in NYC (probably in Manhattan) vs an apartment in NJ (probably Jersey City).
I'm not really sure on how to calculate this since in one of the scenarios we will be living in one state while working in another,
and I also know that in NJ you can't deduct certain contributions (IRA, HSA, anything else?).

I expect to earn about $150K/year (this includes about $15K year end bonus and $35K given in stock throughout the year, which will vary with the stock's value). I will probably contribute the max $18K to my 401K, and the max $3350 to my HSA (though I think my employer might contribute some as well. Would that reduce the amount I can contribute?).  I would be happy contributing to an IRA as well, but I believe that at that income level I can't deduct the contribution. Additionally, because of my visa status, I will be exempt from Social Security and FICA tax, at least for the first year or two. But because of the same visa status, I technically count as a non-resident alien and can't use the standard deduction (though I can itemize).

My girlfriend's status is much simpler - she will be making $80K/year, and contributing the max to her 401K and HSA (we don't know if her employer contributes as well), and probably to an IRA as well (I believe she can deduct at that level, correct?). She's a US citizen, so she'll pay FICA as normal but can take the standard deduction.

Any help comparing the amount of taxes we will pay in each scenario would be appreciated! :)

MDM

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Re: Help figuring out taxes - living in NYC vs NJ
« Reply #1 on: February 14, 2015, 08:29:13 PM »
I think you could buy TaxAct for federal plus Massachusetts (which you need for 2014 anyway) plus New York plus New Jersey for under $50.

Then you could run "what if?" scenarios to your heart's content comparing 2015 taxes with one state residence vs another.  Won't be exact because tax brackets, etc. will change from 2014 to 2105 but this is likely to give you a good enough answer. 

Making the right choice (all things considered, not just taxes) is likely worth >>$50 so it could be a good investment.

theonethatgotaway

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Re: Help figuring out taxes - living in NYC vs NJ
« Reply #2 on: February 14, 2015, 10:08:23 PM »
We moved to jersey. We save about 600 per month in taxes by not living under the city tax umbrella that is new York.

If you two like to go out, transport on the weekends and late at night is a Hassle to and from the city. During the weekday it's quick and cheap.