Live in New Jersey for more takehome pay from NYC biglaw? Forum

[PinkCow]

Can anybody chime in on the tax repercussions of choosing to live in NJ rather than NYC for better tax benefits?

Namely, I know that you can avoid the city tax if you live in NJ, which seems like a big pro for NJ, but have also read that NY has higher deductions for married couples.

I'm married, no kids, and my wife will work for at least a year but probably won't make more than $40-$50K per year. I'll be a 1st year associate at a standard rate.


Advice?

[nealric]

Can anybody chime in on the tax repercussions of choosing to live in NJ rather than NYC for better tax benefits?

Namely, I know that you can avoid the city tax if you live in NJ, which seems like a big pro for NJ, but have also read that NY has higher deductions for married couples.

I'm married, no kids, and my wife will work for at least a year but probably won't make more than $40-$50K per year. I'll be a 1st year associate at a standard rate.


Advice?

Not worth it unless you will be working right next to a PATH station or have a generous firm car service policy. At my firm, you got a free car home after 8:00pm anywhere in the five boroughs- no car if you lived in NJ. Waiting for the PATH at 2:00am after a 16 hour day will get old real quick. I recall the tax savings being only $2-3k.

[Anonymous User]

Not worth it unless you will be working right next to a PATH station or have a generous firm car service policy. At my firm, you got a free car home after 8:00pm anywhere in the five boroughs- no car if you lived in NJ. Waiting for the PATH at 2:00am after a 16 hour day will get old real quick. I recall the tax savings being only $2-3k.

I work at a V5 firm and live in NJ. I take the car service home every night and nobody asks questions. Not sure whether this make our policy generous or your firm's policy stingy.


OP, my take home pay is higher than others at the firm but I pay that back in transportation. Getting to work costs more and it's hard to enjoy living in NJ without a car. I think your decision should be about lifestyle, not money. If you want a bigger home and easy access to a more suburban area then NJ makes sense. If you plan on hanging out in the city most of the time then you might as well just live there. I have kids so this was a no brainer for me, but I could not live here if I were single.

[pertristis]

Not worth it unless you will be working right next to a PATH station or have a generous firm car service policy. At my firm, you got a free car home after 8:00pm anywhere in the five boroughs- no car if you lived in NJ. Waiting for the PATH at 2:00am after a 16 hour day will get old real quick. I recall the tax savings being only $2-3k.

I work at a V5 firm and live in NJ. I take the car service home every night and nobody asks questions. Not sure whether this make our policy generous or your firm's policy stingy.


OP, my take home pay is higher than others at the firm but I pay that back in transportation. Getting to work costs more and it's hard to enjoy living in NJ without a car. I think your decision should be about lifestyle, not money. If you want a bigger home and easy access to a more suburban area then NJ makes sense. If you plan on hanging out in the city most of the time then you might as well just live there. I have kids so this was a no brainer for me, but I could not live here if I were single.

I'm going to be in a similar situation. Could you PM me?

[PinkCow]

[thegrayman]

I thought that income was tied to where you earned it, so that living in NJ would have no impact on paying NY taxes. Is this a "gray area" or is there a conclusive answer out there?

[2014]

I thought that income was tied to where you earned it, so that living in NJ would have no impact on paying NY taxes. Is this a "gray area" or is there a conclusive answer out there?

I think state tax is where you earn it, city tax is where you reside.

Need a circular w/e disclosure lol

[pertristis]

I thought that income was tied to where you earned it, so that living in NJ would have no impact on paying NY taxes. Is this a "gray area" or is there a conclusive answer out there?

I think state tax is where you earn it, city tax is where you reside.

Need a circular w/e disclosure lol

I think state tax can actually be both. Last time I checked, though, NJ provides a dollar-for-dollar credit for taxes paid to NY (if not other states, as well), so it turns out to be where it's earned (assuming that NJ's income tax is equal to or less than NY's).

[mw115]

I think state tax is where you earn it, city tax is where you reside.

This is true.

[Rams55]

2-3K is a little low; it's probably closer to 4-5K saved in NYC taxes. Plus, you save the cost difference in apartments, which in Jersey City can be a couple hundred less a month. I moved from the Financial District to Jersey City this year and got a bigger apartment with an in-unit washer/dryer, right next to the exchange place Path stop, and saved over 12K between taxes and rent (I don't have a car).

[anonnymouse]

The difference is $5718 for a single filer at 1st year market. For OP (married, no kids), it will be either a $7064 difference (assuming $40k for wife and married filing separately) or a $7083 difference (assuming $40k for wife and married filing jointly).

NYC city tax tables here: http://www.tax.ny.gov/pdf/current_forms ... hedule.pdf

[badaboom61]

Don't forget that you can deduct the city tax from your federal taxes, so assuming you're itemizing then that'll knock 28% off any tax savings you get by living in Jersey.

[Old Gregg]

2-3K is a little low; it's probably closer to 4-5K saved in NYC taxes. Plus, you save the cost difference in apartments, which in Jersey City can be a couple hundred less a month. I moved from the Financial District to Jersey City this year and got a bigger apartment with an in-unit washer/dryer, right next to the exchange place Path stop, and saved over 12K between taxes and rent (I don't have a car).

This this this. Whoever says additional cost of transportation (aka an additional monthly pass for the PATH) will negate the savings in rent and taxes isn't doing their finances right.

[OutCold]

Since we're on the topic, how inconvenient is the commute from Jersey to Midtown East near Grand Central?

[Old Gregg]

Since we're on the topic, how inconvenient is the commute from Jersey to Midtown East near Grand Central?

Take the Path to WTC, and then the E to Midtown East. The trip is around 45 minutes if leaving from Exchange Place.

[jemes21]

My commute from downtown Hoboken to grand central is less than 40 mins most days. I take: PATH to 14th street. Connect to L for one stop to union square. Connect to 4/5 express to Grand Central. It sounds like a lot with the transfers but at rush hour it's never more than a few mins per train. I've tried a few different routes and this is the one I think is most efficient/least time above ground when it's raining.

[Anonymous User]

Thanks for the replies guys. My firm is downtown essentially right in front of the path train which is why I think Jersey City or Hoboken would be a really viable option. Plus affordability/space. Any other thoughts?

How much more space can you get in NJ v. Manhattan?