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Old Aug 9, 2013, 10:05 PM   #1
einmusiker
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considering moving from NY state to PA for tax purposes

I don't have a problem paying taxes for things that are needed by the government, but NY state is SO wasteful and corrupt and I am being taxed out of here. I gross just over $90k and pay approximately $35k of that to taxes. My work is only about 30 miles from the Pennsylvania border and I am considering renting a place there and making it my permanent residence in order to get some tax relief. About how much per year could I save by changing my primary residence to PA? Thanks for any feedback
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Old Aug 10, 2013, 12:52 AM   #2
malman89
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The half answer is: Google would help.

The full answer is: Ask someone who really knows what they're talking about.

Based off my bored and lazy Googling, you will save nothing:

http://www.tax.ny.gov/pit/ads/it203_information.htm

http://www.tax.ny.gov/pdf/2012/inc/it203i_2012.pdf

If you were a nonresident of New York State, you are subject to New York State tax on income you received from New York State sources in 2012. If you were a resident of New York State for only part of 2012, you are subject to New York State tax on all income you received while you were a resident of the state and on income you received from New York State sources while you were a nonresident. To compute the amount of tax due, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return. You will compute a base tax as if you were a full-year resident, then determine the percentage of your income that is subject to New York State tax and the amount of tax apportioned to New York State [p. 5]

I don't see anything from my 2 minutes of searching that states there is a different tax rate for residents v. non residents, which from my limited knowledge is more commonly the case in city taxes (City of Detroit resident tax is ~2.5%, while non-residents is ~1.5%).

Looks like you should work in Jersey and live in PA. Then you wouldn't have to pay NJ income taxes - http://taxes.about.com/od/statetaxes...agreements.htm
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Old Aug 10, 2013, 10:56 PM   #3
einmusiker
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Quote:
Originally Posted by malman89 View Post
The half answer is: Google would help.

The full answer is: Ask someone who really knows what they're talking about.

Based off my bored and lazy Googling, you will save nothing:

http://www.tax.ny.gov/pit/ads/it203_information.htm

http://www.tax.ny.gov/pdf/2012/inc/it203i_2012.pdf

If you were a nonresident of New York State, you are subject to New York State tax on income you received from New York State sources in 2012. If you were a resident of New York State for only part of 2012, you are subject to New York State tax on all income you received while you were a resident of the state and on income you received from New York State sources while you were a nonresident. To compute the amount of tax due, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return. You will compute a base tax as if you were a full-year resident, then determine the percentage of your income that is subject to New York State tax and the amount of tax apportioned to New York State [p. 5]

I don't see anything from my 2 minutes of searching that states there is a different tax rate for residents v. non residents, which from my limited knowledge is more commonly the case in city taxes (City of Detroit resident tax is ~2.5%, while non-residents is ~1.5%).

Looks like you should work in Jersey and live in PA. Then you wouldn't have to pay NJ income taxes - http://taxes.about.com/od/statetaxes...agreements.htm
thanks for the info. I will ask a coworker that I know lives in PA to make sure
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Old Aug 10, 2013, 11:39 PM   #4
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How much of that $35k was actually to NYS? Looking at their tax rates for 2012, NYS tax on $90,000 is $5,518.

Taking that into account, are you even filling out your 1040 correctly? 33% seems like an awfully high effective tax rate, especially because the highest NYS bracket you're in is 6.65% and the highest federal bracket is 28%.

Edit: Federal income tax on $90,000 for a single person with no dependents (a worst case tax scenario) is just under $15,000 taking a standard deduction and one exemption from yourself. I have no clue where you're getting $35,000 in taxes from.

Last edited by yg17; Aug 10, 2013 at 11:45 PM.
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Old Aug 10, 2013, 11:48 PM   #5
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I should say it's not just taxes, it's all my deductions including union dues etc.
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Old Aug 10, 2013, 11:52 PM   #6
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I should say it's not just taxes, it's all my deductions including union dues etc.
Those won't change by moving across state lines. You might get a thousand or two in tax relief by moving to PA, but it seems like that would be offset by more gas and wear and tear on your car with a longer commute.
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Old Aug 11, 2013, 12:14 AM   #7
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Are you confusing income tax versus property tax? To the best of my knowledge, and hyper simplified, you will pay income tax based on where you earn income and pay property tax on where you have property.

But I could be entirely wrong.
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Old Aug 11, 2013, 12:37 AM   #8
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Are you confusing income tax versus property tax? To the best of my knowledge, and hyper simplified, you will pay income tax based on where you earn income and pay property tax on where you have property.

But I could be entirely wrong.
I think in my previous post I was wrong when I said he might get a little bit of tax relief. I'm not sure how PA and NY work, but in MO and IL - the states I'm familiar with, what you said is exactly correct.

I know for people who live in MO and work in IL (or vice versa) they pay income taxes to IL, then they can claim what they paid to IL as a credit on their MO taxes. And IL taxes will almost always be higher than MO's taxes. So if their IL tax is $6,000 and their MO tax is $4,000, they can claim a credit for what they paid to IL on their MO taxes. But, MO's not going to give you free money for working in another state, so the best you can do is claim a $4,000 credit and owe MO nothing.

Tax is paid to the state where it is earned. So athletes, who play games all over the country, are paying taxes in 20 or 30 states. And MLB and NHL players also pay taxes to Canada and the province for games played there. I'd hate to be an athlete's tax preparer although I bet they make good money for keeping track of that cluster****.

Property taxes are based of where the property is. They might be a bit cheaper in PA, but probably not enough to justify moving.


In short, to answer your question: No, it wouldn't be worth moving. You won't save much, if anything, and if a bulk of your withholdings are not taxes, those won't change either. Hopefully some of that money being withheld is for a 401k.

Last edited by yg17; Aug 11, 2013 at 12:46 AM.
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Old Aug 11, 2013, 01:31 PM   #9
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I knew someone that was relocated within the same company but from a Western MA. facility to a NY facility, though he still lived in MA as it wasn't a far drive. That change didn't last long, he looked for and took a different job in MA as NY's non-resident worker taxes killed him.

Have a read here. This looks to be a financial-law attorney, they break it down.

http://www.hodgsonruss.com/Home/Prac...locationIssues
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Old Aug 12, 2013, 04:49 PM   #10
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wasn't there a huge uproar recently when Phil Mickelson said he was considering leaving California because he pays too much in taxes for living there?

edit: http://www.theblaze.com/stories/2013...ng-high-taxes/
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Old Aug 12, 2013, 05:14 PM   #11
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If you really want to avoid the state dipping into your income move on down here to Texas. I grossed about $120k last year working in the oil field sector and paid a staggering $0 in state taxes. Can't beat that.
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Old Aug 12, 2013, 05:47 PM   #12
yg17
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If you really want to avoid the state dipping into your income move on down here to Texas. I grossed about $120k last year working in the oil field sector and paid a staggering $0 in state taxes. Can't beat that.
I'd rather pay taxes and not have to live in Texas.
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Old Aug 12, 2013, 05:49 PM   #13
Plutonius
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I don't have a problem paying taxes for things that are needed by the government, but NY state is SO wasteful and corrupt and I am being taxed out of here. I gross just over $90k and pay approximately $35k of that to taxes. My work is only about 30 miles from the Pennsylvania border and I am considering renting a place there and making it my permanent residence in order to get some tax relief. About how much per year could I save by changing my primary residence to PA? Thanks for any feedback
If you work in NY, you will most likely still have to pay income tax to NY.
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Old Aug 14, 2013, 12:13 PM   #14
CountryBobs
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If you really want to avoid the state dipping into your income move on down here to Texas. I grossed about $120k last year working in the oil field sector and paid a staggering $0 in state taxes. Can't beat that.
I'm curious about how a state that big funds its government. I found this:

Texas Revenue

Sounds like you and others are paying plenty in taxes, fees, etc.
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