Real Estate in New Jersey

Real Estate in New Jersey is a very valuable commodity. Whether you are referring to North NJ, Central NJ or South NJ; real estate in New Jersey has a tremendous amount of value. This is if you are interested in selling or buying.

This is from a recent article from The Daily Record

05/5/06 - Posted from the Daily Record newsroom

Here's how to save on next year's taxes

Now that you have paid a fortune in taxes for 2005, it's time to take steps to ease the pain in 2006.

Some tips:

• Consider dividend-paying stocks rather than bonds because certain dividends are taxed at a maximum of only 15 percent (at least through 2008).

• Watch out for stuff you buy online from out of state. Many states are starved for cash, and they may start coming after taxpayers who don't pay sales (or "use") taxes on merchandise they order online. (The larger vendors do require you to pay state taxes, but the smaller ones may not.)

• If you are going to win at the racetrack, win in January, not in December. You may be able to postpone paying tax on your windfall for a year.

Besides, you now can remember to save all your chits on horses that lost -- the cost of which can offset your winnings.

These precious nuggets of advice come from Rosemary Ervin, a CPA with the Hunter Group in Fair Lawn, who gave a talk last week before the Institute for New Dimensions.

It's not just federal taxes we pay, she reminded us. There are state income taxes, sales taxes, real-estate taxes (if you don't pay them, your landlord does), gift taxes, estate taxes, excise or "sin" taxes (on alcohol, tobacco, firearms and tires), and employment taxes (some of which go to Social Security and Medicare).

There also are hidden taxes, such as the "litter" tax, which businesses pay when they create litter. (A pizza parlor pays an extra tax for the litter-producing pizza box.)

Sales taxes are "regressive," meaning that the poor pay a higher percentage of their disposable income on taxes than rich taxpayers pay.

Disposable income: Money people can do with as they like, after expenses for food, shelter and health.

New Jersey's sales tax -- 6 percent -- may go to 7 percent, Ervin went on.

While other states may have lower sales tax rates, or no sales taxes, New Jersey generously exempts food and clothing, with exceptions: Halloween costumes are taxed.

Florida, everyone knows, has no income tax, but it collects money from lodging and an assortment of other entertainment taxes.

True, we New Jerseyans pay a relatively high real-estate tax, Ervin said, but as a result, we have better schools.

New Jersey also gives real-estate tax rebates -- typically just before elections.

While New Jersey is very kind to the elderly (they vote), the state is not especially kind to businesses, Ervin said, which helps explain why many businesses are fleeing to other states.

"Maybe things will change, but when the new administration addresses our budget deficit, it's likely it will turn to business to help."

While New Jerseyans are supposed to pay 6 percent sales taxes on taxable items they buy, including stuff they buy on the Internet, few of them pay this use tax with their income-tax returns, Ervin said.

But now various states, including the Garden State, are going after vendors to get them to collect and submit taxes from out-of-state buyers.

"Don't wait to get caught," she advised. "If you buy taxable items out of state, look into the use tax."

A good way to save on taxes is to avoid climbing a "cliff." Ours is a graduated tax -- the more taxable income you have, the higher the rate you pay. (The federal cliffs: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent.)

So, if you can keep from going over one of the cliffs, your rate should be lower.

Ways to do it: Deferring a bonus. Mailing out bills late in December, so they constitute January income. Paying deductible expenses in December.

New Jersey's income-tax form doesn't resemble the federal form, Ervin said. One way it differs: No negative numbers are allowed. You cannot deduct investment losses, for instance, unless you deduct them against gains in the same year.

A question someone asked: Should someone make a child the beneficiary of an IRA?

Yes, she answered, if the spouse doesn't need the money. While the child will have to make withdrawals immediately in the event of your death, the withdrawals will be small.

An interesting piece of advice she gave: Make the executor of your will someone at least a generation younger than you are.

Recently a 95-year-old died, and his executor was an old friend of his, age 92.

He needed help.

• • •

More tax tips -- these from Marcia Geltman, CPA, of Nisivoccia & Co. in Randolph:

"My very favorite tax tip is to take advantage of retirement savings plans. There are significant tax breaks for both employees and self-employed individuals. Some plans even allow one to make contributions by the filing date of the tax return and still get the benefit of the deduction for the prior year.

"Another possibility is shifting the dependency exemption. The tax laws changed a few years ago and now in some circumstances allow someone other than the parent to claim the exemption for a child. This can be beneficial when the parent is in a tax bracket where the exemption is lost or where the education credits may be lost.

"Just a note of caution: The tax laws are complicated and need to be read carefully to make sure that the rules apply to each unique set of circumstances."

Tip #24

Home Selling Tip, Listing Right:
A common mistake when people list their house (especially in a buyers’ market) is list the house at a high price that they don’t anticipate to sell it at. They figure that if they get it then GREAT but if not they can always lower the price.

This is not a good practice because what mostly happens is it will stay on the market for a while and make potential home buyers nervous because it’s been on the market so long.

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Real Estate in New Jersey

Tip #23

Tip #24