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Income tax and living on LI
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Income tax and living on LI
Posted by Blu-ize
Posted by ave1024
Posted by dpli
Posted by Blu-ize
Figure in the real estate tax deduction and you would be way ahead living in LI.
I didn't account for this - this is definitely true for us.
The real estate deduction shouldn't be part of the formula used on deciding because you pay both your Long Island Property Taxes, and your NYC Income Taxes with gross salary. There is no additional "deduction" because both are paid with gross income.
So if you have to pay say 11k in Long Island property taxes, your AGI (adjusted gross income) would need to be about 165k to break even because to be on the hook for 11k in NYC income taxes, you have to be making about 165k (after 401k deductions).
Things like commuting (LIRR, subway) can be factorted in after the fact since those are variables.
How do you figure? If you don't own in NYC and own in LI you can count that.
Now if they own in both places then it's moot.
I was comparing owning in both because I thought that is what we were discussing here.
If you are renting in NYC and owning in LI, then you have to use a rent vs. own calculator and take into consideration what your paycheck withholding would look like in both scenarios because the local taxes would be different.
But if you want to look at it that way, I think that's more of an apples vs. oranges comparison (renting vs. owning) and thats another discussion altogether.
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Posted 10/26/09 4:19 PM  |
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dpli
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Member since 5/05 13973 total posts
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Re: Income tax and living on LI
Posted by ave1024
Posted by dpli
Posted by Blu-ize
Figure in the real estate tax deduction and you would be way ahead living in LI.
I didn't account for this - this is definitely true for us.
The real estate deduction shouldn't be part of the formula used on deciding because you pay both your Long Island Property Taxes, and your NYC Income Taxes with gross salary. There is no additional "deduction" because both are paid with gross income.
I will clarify since I was quoted. We were looking to buy in Nassau or Queens. After looking in the areas we thought we could afford, without factoring in any mortgage deduction, we realized that it was a wash. Either we would pay more in income tax or more in property tax. After buying our house, we got the tax deduction for our mortgage. However, I realize that since the price of the home might have been more in Queens, we would probably have a larger deduction for our mortgage there, so I might have misspoken in my second comment. I would not have sent children to the public schools in the areas in Queens we probably could have afforded, so I personally would have been paying for private school.
In the end, there are a lot of factors to consider - for us the dollar value wasn't that significant and we preferred the services and schools on LI. You really have to look at all the facotrs and $$ values in your scenario and figure out which works best.
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| Posted 10/26/09 4:29 PM |
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| Pages: 1 [2] |
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